Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.

Llanelly District Traction Bill,

Solihull Urban District Council Bill,

Surrey County Council Bill,

As amended, considered; to be read the Third time.

South Staffordshire Water Bill [Lords],

Read a Second time, and committed.

Epsom and Walton Downs Regulation Bill [Lords] (by Order),

Read a Second time, and committed.

MINISTRY OF HEALTH PROVISIONAL ORDER (ESSEX) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the County of Essex," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 103.]

MINISTRY OF HEALTH PROVISIONAL ORDER (HEATHFIELD AND DISTRICT WATER) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the Heath-field and District Water Company," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners

of Petitions for Private Bills, and to be printed. [Bill 104.]

MINISTRY OF HEALTH PROVISIONAL ORDER (HELSTON AND PORTHLEVEN WATER) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the Helston and Porthleven Water Company," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 105.]

MINISTRY OF HEALTH PROVISIONAL ORDER (LANCASTER) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the borough of Lancaster," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 106.]

MINISTRY OF HEALTH PROVISIONAL ORDER (LEEDS) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the city of Leeds," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 107.]

MINISTRY OF HEALTH PROVISIONAL ORDER (RAMSEY AND SAINT IVES JOINT WATER DISTRICT) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the Ramsey and Saint Ives Joint Water District," presented by Sir Kingsley Wood; read the


First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 108.]

MINISTRY OF HEALTH PROVISIONAL ORDER (TEES VALLEY WATER BOARD) BILL,

"to confirm a Provisional Order of the Minister of Health relating to the Tees Valley Water Board," presented by Sir Kingsley Wood; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 9.]

Oral Answers to Questions — INDIA.

POLITICAL DEPARTMENT (CADRE POSTS).

Mr. DAY: asked the Under-Secretary of State for India the total number of posts filled and held on the political department cadre as at the last convenient date; and how many of these were held by Europeans or Indians, respectively?

The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): On 2nd January last the numbers of Political Department cadre posts held by Europeans and Indians respectively were 93 and nine. In addition, three Indians were seconded to other duties and one was under training.

Mr. DAY: Has the recruitment of Europeans increased since the report of the Lee Commission.

Mr. BUTLER: The Lee Commission recommended a certain ratio, and although there has been a larger proportion of Europeans recruited recently, the recruitment of Indians has not ceased.

NUTRITION.

Mr. MATHERS: asked the Under-Secretary of State for India whether he is aware of the investigations by the League of Nations into problems of nutrition and the recommendation of the mixed committee that national committees should be set up to make national investigations; that the conference on rural hygiene in the Far East and the Congress of the Far Eastern Association of Tropical Medicine propose in their next sessions to consider nutrition in Asia and the Far East; and whether he is taking steps to investigate the standard of nutri-

tion of the Indian people and how to improve it?

Mr. BUTLER: I am aware of the facts stated by the hon. Member in the first and second parts of the question. The question of nutrition is, and has been for some years, engaging the attention of the Government of India; and nutritional surveys in selected areas are now being carried out under the auspices of the Indian Research Fund Association, which is financed by the Government of India.

Mr. MATHERS: May I take it from the answer that the matter of nutrition is looked upon as of great importance?

Mr. BUTLER: Yes.

Oral Answers to Questions — CHINA.

SINKIANG.

Major-General Sir ALFRED KNOX: asked the Secretary of State for Foreign Affairs whether he is yet able to give any information as to the results of Sir Eric Teichman's recent journey through Sinkiang; what are the present conditions in that province; and what is being done to preserve British trading interests and rights in that province?

The PRIME MINISTER (Mr. Baldwin): As regards the first part of the question, Sir E. Teichman's report is still under consideration, and I am not in a position to make a statement upon it. As regards conditions in Sinkiang, I understand that the Tongan forces remain in possession of the Khotan area, where they have been since 1934, but the general condition of the province is peaceful. As regards the last part of the question, every effort is made, whenever the necessity arises, to preserve British interests and rights in. Sinkiang by means of representations to the local authorities by His Majesty's Consul-General at Kashgar.

Sir A. KNOX: Can the right hon. Gentleman give us some hope that Sir Eric Teichman's report will be published shortly?

The PRIME MINISTER: We have not come to a decision on that point yet. Perhaps the hon. and gallant Member will put a question on the Paper at a later stage.

OUTER MONGOLIA.

Sir A. KNOX: asked the Secretary of State for Foreign Affairs whether he has any information as to the agreement recently concluded between Soviet Russia and Outer Mongolia providing for mutual assistance by all means in the matter of averting and preventing the menace of military attack, as also of rendering each other aid and assistance in case of attack by any third State; to what extent this agreement constitutes Outer Mongolia an independent State; and whether Outer Mongolia is no longer a part of the Chinese dominions?

The PRIME MINISTER: As regards the first part of the question, I would draw my hon. and gallant Friend's attention to the statement on the subject which my noble Friend made on 21st April in reply to a question put by the hon. Member for Gower (Mr. Grenfell). As regards the second and third parts of the question, His Majesty's Government continue to regard Outer Mongolia as under Chinese suzerainty; and since the conclusion of the Protocol of 12th March the Soviet Government have declared that, in their view the Sino-Soviet Treaty of May, 1924, in which Outer Mongolia was recognised as an integral part of the Chinese Republic, is not infringed by the Protocol and retains its force.

Sir A. KNOX: Surely it is rather extraordinary that Soviet Russia should make a defensive treaty with some part of the Chinese Republic? Does not the right hon. Gentleman think that this should be the subject of sanctions against Soviet Russia to prevent this act of aggression?

SMUGGLING.

Mr. CHORLTON: asked the Secretary of State for Foreign Affairs whether he can yet say what steps are to be taken to safeguard British trade in North China, in view of the extensive smuggling of Japanese goods from Dairen into China through the autonomous area of East Hopei; and what is being done to check the smuggling?

The PRIME MINISTER: His Majesty's Government are at present in active correspondence with the Japanese Government in regard to this question with a view to protecting the British interests involved, which have been explained in representations made by His

Majesty's Ambassador in Tokyo. I am unable to say more at the present stage.

Mr. CHORLTON: When does the right hon. Gentleman hope to be able to say something more about this important point?

The PRIME MINISTER: I cannot say at the moment.

Mr. CHORLTON: asked the Secretary of State for Foreign Affairs whether he is aware that in the terms of the Tangku truce between the Japanese army and the North China authorities not more than two Chinese revenue cutters are permitted to approach within three miles of the coast; and whether he will draw the attention of the Japanese and Chinese Governments to the serious encouragement to smuggling arising from this limitation, to the detriment of the Chinese customs on which British and other foreign loans are secured?

The PRIME MINISTER: I am not aware that the restriction mentioned by my hon. Friend is imposed by the Tangku armistic agreement, but the difficulties experienced by the Chinese authorities in combating smuggling activities have been brought to the notice of the Japanese Government by His Majesty's Ambassador in Tokyo.

Mr. CHORLTON: Has there been any reply yet?

The PRIME MINISTER: Not that I am aware of. Perhaps the hon. Member will put down a further question.

Oral Answers to Questions — ITALY AND ABYSSINIA.

Sir ROBERT TASKER: asked the Seretary of State for Foreign Affairs what action has been taken by the Council of the League of Nations in connection with the following communications from the Italian Embassy, and designated: official No. C63.M22. 1936 VII, dated 28th January, 1936; official No. C104.M45. 1936 VII, dated 10th March, 1936; official No. C123.M62. 1936 VII, dated 19th March, 1936; and has he called the attention of His Majesty's Government to the documents in which the Italian Government give details of Abyssinian barbarity?

The PRIME MINISTER: As regards the first part of the question, I would


refer my hon. Friend to the statement made by my right hon. Friend on 22nd April last in answer to the hon. Member for Wolverhampton East (Mr. Mander), and the hon. and gallant Member for Nuneaton (Lieut.-Commander Fletcher) showing the action taken by the League of Nations with regard to the alleged violations of the laws of war on either side during the recent campaign in Abyssinia. As regards the second part of the question, the communications were circulated by the League of Nations to His Majesty's Government in the United Kingdom for their information.

Mr. VYVYAN ADAMS: As regards the second part of the question, can the right hon. Gentleman tell us on how many occasions the Ethiopians used gas?

Miss RATHBONE: Is it not the case that the Committee of Jurists reported a large number of authorised mass atrocities by Italian airmen and a relatively insignificant number of cases of unauthorised atrocities by Ethiopians?

The PRIME MINISTER: Perhaps the hon. Lady will put that question down.

Mr. LEACH: asked the Secretary of State for Foreign Affairs the total receipts paid, or payable, by the Italian Government to the Suez Canal Company since the beginning of the transport of troops, munitions, gas tanks, etc., to East African ports?

The PRIME MINISTER: I regret that the information desired is not available.

Mr. LEACH: Can the right hon. Gentleman say the date when I can put a further question on the subject?

The PRIME MINISTER: The hon. Member can put down a question at any time, but the Suez Canal Company is a private company, and we have no means of compelling them to give information.

Mr. LEACH: Surely they would not refuse to give the information?

Mr. THORNE: As the British Government have the larger number of shares in the company, surely there is some means of getting this information?

The PRIME MINISTER: We have no power of compulsion.

Sir PERCY HARRIS: Do not the Suez Canal Company publish complete figures for each month of the number of persons who go through and their receipts?

The PRIME MINISTER: I will look into that. If it is so, it might provide an answer to the question.

Mr. LEACH: Will the right hon. Gentleman try to get this information if I put a further question to him?

The PRIME MINISTER: I am always anxious to give information, but I do not know how this information can be obtained unless it is in tile way suggested by the hon. Member for South-West Bethnal Green (Sir P. Harris).

Miss WILKINSON: asked the Secretary of State for Foreign Affairs whether, in view of the proclamation of annexation of Abyssinia by Italy, it is the intention of the Government not to regard as rebels those subjects of the present empire who maintain resistance to Italian annexation?

The PRIME MINISTER: I presume the hon. Member is referring to those Abyssinians who make take refuge in British territory while still under arms. So far as these are concerned, it is not proposed to treat them in any other way than has been done in the past.

Miss WILKINSON: I am afraid that the right hon. Gentleman has misunderstood my question. I was not referring to those who might have taken refuge in British territory, but to those remaining in their own territory and who are continuing the struggle against Italian annexation?

The PRIME MINISTER: I do not think that is a matter for His Majesty's Government.

Commander LOCKER-LAMPSON: Are these loyalists in Abyssinia not to have the support of His Majesty's Government?

Miss WILKINSON: May I refer the right hon. Gentleman to his own answer to a question concerning Manchuria earlier this afternoon, when he stated that they were still recognised as Chinese subjects? Is the same privilege to be extended to the Abyssinians as His Majesty's Government now extend to the Chinese over whom the Japanese claim sovereignty?

The PRIME MINISTER: I find it rather difficult to understand what the hon. Lady meant in this question. I am obliged to her for her supplementary question. In regard to the position inside Abyssinia, it is, of course, one of extreme complexity, and one that must be dealt with by the League of Nations. It is not one with which we can deal as a Government alone. I thought she was alluding to Abyssinian soldiers who got out of Abyssinia into British territory.

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs whether it is the intention of His Majesty's Government that the Emperor of Ethiopia is to be treated according to the rules of international law relating to neutrality or as the head of a State which is a Member of the League of Nations entitled to the protection of the League Covenant?

The PRIME MINISTER: The hon. Member will recall that my right hon. Friend stated on 4th May that the Emperor had informed His Majesty's Minister at Addis Ababa that he had renounced the direction of affairs. The personal position of His Majesty thus raises issues of considerable complexity which must be the subject of careful consideration.

Mr. HENDERSON: Is it not a fact that the Foreign Secretary told the House the other day that the Emperor was expected, as long as he remained in Palestine, not to participate in the direction of hostilities in Abyssinia? Is it not a fact that this Government, as well as other States Members of the League, are equally interested with Abyssinia in resisting this aggression? That being the fact, is it not desirable that, so far from putting obstacles in the way of the Emperor, he should be afforded every assistance for dealing with the present situation in his own country?

The PRIME MINISTER: I think the supplementary questions put by the hon. Member show what extreme complexity there is in the situation. He may depend upon it that the British Government will examine that with very great care, and undoubtedly it is a matter which concerns the whole League of Nations.

Commander LOCKER-LAMPSON: May I ask which of the two Emperors we are to recognise?

Mr. HENDERSON: Will the Government resist any suggestion that the rules of international law relating to neutrality which have hitherto applied in such cases shall not be utilised to restrain the activities of the Emperor?

The PRIME MINISTER: We shall try to pursue whatever may be the honourable course.

Mr. HENDERSON: asked the Secretary of State for Foreign Affairs whether His Majesty's Government will recommend the League Council to allow the Ethiopian Government to participate through its representatives in the forthcoming deliberations at Geneva despite the present military situation in Ethiopia?

The PRIME MINISTER: The Ethiopian Government are represented at Geneva, and I see no reason to anticipate that their representatives will not be listened to.

Mr. HENDERSON: May I take it from that answer that, as far as the British Government are concerned, the authorised representatives of the Abyssinian Government will be allowed the same facilities for representing their country's interests at Geneva as was the case up to the apparent annexation of their country as announced by Mussolini?

Brigadier-General Sir HENRY CROFT: Is this not purely and simply a matter for the League of Nations, and would it not be fatal for this country to lay down decisions before the League of Nations?

The PRIME MINISTER: I have given the answer to the question, and I prefer myself not to draw any deductions from it.

Mr. T. JOHNSTON: Would the right hon. Gentleman not at least be prepared to recommend the League of Nations to give the Emperor his money back?

Mr. COCKS: asked the Secretary of State for Foreign Affairs whether his attention has been called to the statements of the South African Prime Minister, Dr. Hertzog, and by General Smuts, in support of the continuation of sanctions against Italy; and whether, in deciding upon the policy to be pursued by the British Government at Geneva, he will take into consideration the views expressed by these leading members of the Government of the Union of South Africa?

The PRIME MINISTER: The reply to both parts of the question is Yes, Sir.

Mr. COCKS: Will the right hon. Gentleman pay as much attention to the views of these Empire soldier statesmen as he does to English political runaway rabbits?

Sir WILLIAM DAVISON: asked the Secretary of State for Foreign Affairs whether he can inform the House as to the approximate amount of oil supplied to Italy during recent months from British and Russian sources, respectively?

The SECRETARY for MINES (Captain Crookshank): No official information in regard to these sources of supply to Italy is available later than that for the year 1935 published in Command Paper 5094.

Mr. JOHNSTON: Could the hon. and gallant Gentleman inform the House whether the oil supplied from British sources includes the oil supplied by subsidiary corporations to the Anglo-Iranian, such as the Anglo-Egyptian Corporation?

Captain CROOKSHANK: Not without notice, but perhaps it would interest the right hon. Gentleman to know that the quantity of oil of British origin is insignificant, that is to say, from Trinidad, India or the British East Indies.

Mr. SHINWELL: Why does the hon. and gallant Gentleman say he cannot give information in respect to British supplies of oil when the Foreign Secretary stated the other day in the course of the Debate that we supplied 4 per cent. of the oil now being used by the Italians in Abyssinia?

Captain HAROLD BALFOUR: Could this question not be decided by the Leader of the Opposition undertaking another continental mission on foreign affairs in order to ensure continuity of policy?

Mr. GARRO-JONES: asked the Secretary of State for Foreign Affairs whether the British Legation at Addis Ababa is still under military guard; and, if not, who is responsible for the protection of British subjects from violence?

The PRIME MINISTER: The answer to the first part of the question is in the affirmative. But primary responsibility for the maintenance of order in Addis Ababa now rests with the Power which is in military occupation of that place.

Mr. GARRO-JONES: Can the Prime Minister assure the House that however much it may be necessary to recognise the de facto position of the Italian command in Abyssinia, he will take no step which will give legal or de jure recognition to their authority there?

The PRIME MINISTER: As this brings up a very wide question, I am not prepared to go into it in answer to a question.

Commander BOWER: In view of the urgency of this matter, would it not be advisable to supplement the military guard at Addis Ababa by sending out the well-known regiments, Attlee's artillery, Dalton's dragoons and Lansbury's lancers?

Mr. GARRO-JONES: asked the Secretary of State for Foreign Affairs whether he will specify the Government to whom Sir Sidney Barton is now accredited; and whether His Majesty's Government propose to withdraw their Minister from Addis Ababa?

The PRIME MINISTER: Sir Sidney Barton is accredited to the Ethiopian Government. I can make no statement with regard to the second part of the question.

Mr. GARRO-JONES: When the right hon. Gentleman says that Sir Sidney Barton is accredited to the Ethiopian Government, is he referring to the group of Ministers to whom the Emperor delegated his authority, or does the Emperor still constitute a part of that Government?

The PRIME MINISTER: The hon. Member asked me to whom Sir Sidney Barton was accredited. He was accredited to the Ethiopian Government. As the hon. Members knows, the position now is exceedingly complicated. I should not like to answer to whom he is accredited at this moment.

Mr. GARR0-JONES: If he is still accredited to the Ethiopian Government on the authority of the Prime Minister, is not the Prime Minister able to state who the Ethiopian Government are?

The PRIME MINISTER: Perhaps the hon. Member will be good enough to put that question on the Paper.

Miss WILKINSON: asked the Secretary of State for Foreign Affairs whether the Emperor of Abyssinia made any application to the British Government for permission to come direct to London from Djibuti; whether it was the British Government who decided he must go to Palestine; and what was the reason for this?

The PRIME MINISTER: If the hon. Lady will refer to the very full statement made by my right hon. Friend on 4th May, she will find that the arrangement to give the Emperor and his family passage from Jibuti in His Majesty's Ship "Enterprise" was made in accordance with a desire which His Majesty had expressed to His Majesty's Minister at Addis Ababa to proceed to Palestine. After the voyage had begun, the Emperor inquired whether it would be possible to convey him direct to England instead of landing at Haifa, but it was not found possible on practical grounds to make this alteration.

Miss WILKINSON: Was one of those practical grounds which made it impossible the desire of His Majesty's Government to avoid popular demonstrations in favour of the Abyssinians?

The PRIME MINISTER: That is exactly the kind of idea that would come to the mind of a critic of the Government, but there is not a word of truth in it. I do not think the hon. Lady quite realises the position. The offer of a passage in one of His Majesty's cruisers was a special act of courtesy, which we were very glad to pay and very happy to be able to accord, but it entailed a good deal of inconvenience to keep a ship of that class from her normal duties, and I say that it was impracticable, having detached her for a week from her duties, to change the programme still further. It will be remembered, moreover, that there were also on board the Empress and her family and suite, and they were definitely anxious to take up residence in Palestine. Had it been possible, had we had an unlimited number of cruisers, we might have done more, but I shall look forward with some confidence to the hon. Lady supporting a Motion for more cruisers.

Miss WILKINSON: While saying that I should be charmed to support cruisers

for the purposes of peace and conveyance, may I ask whether we are to understand from the right hon. Gentleman's answer that if the Emperor desires to come to London, this Government will be graciously pleased to receive him?

Sir FRANK SANDERSON: asked the Secretary of State for Foreign Affairs whether, in view of the fact that sanctions were imposed upon Italy by the League of Nations as a deterrent against the aggressor and in order to shorten the Italo-Abyssinian war, that this war has now come to an end, and in view of the dangers of maintaining sanctions as a punishment, he will, at the forthcoming meeting of the Council of the League of Nations, propose the withdrawal of sanctions?

The PRIME MINISTER: I have nothing to add to the statements made on behalf of His Majesty's Government in the course of last Wednesday's Debate.

Sir F. SANDERSON: Has my right hon. Friend considered that the League's policy of economic sanctions is forcing the Governments of the world into a policy of economic nationalism?

Lieut.-Commander FLETCHER: asked the Prime Minister whether he will instruct the British High Commissioner to ascertain from the Emperor of Ethiopia who are the individuals now comprising the Ethiopian Government?

The PRIME MINISTER: So far as His Majesty's Government are aware, the constitution of the Ethiopian Cabinet is identical with that existing prior to the departure of the Emperor, with the exception of the Minister for Foreign Affairs who accompanied His Majesty, while the Minister for War was recently killed in action.

Lieut.-Commander FLETCHER: asked the Prime Minister whether it is the intention of His Majesty's Government to take any steps at Geneva to ensure that, as a result of the issue of the Italo-Ethiopian war, Italy shall not recruit or conscript the Ethiopian native population for Italian military purposes?

The PRIME MINISTER: His Majesty's Government have no information that any such action is contemplated by the Italian Government.

Mr. GARRO-JONES: asked the Prime Minister whether the instructions to the British delegate at the forthcoming meeting of the League of Nations cover the recognition of Ethiopian representatives thereat; and whether, for their part, His Majesty's Government are prepared to accept any representatives who may be appointed by the group of Ministers to whom the Emperor delegated the de jure government of Ethiopia?

The PRIME MINISTER: No special instructions have been issued. The United Kingdom representative will certainly not oppose the hearing of any Ethiopian representatives whom the Council may be prepared to accept in that capacity.

Oral Answers to Questions — LEAGUE OF NATIONS.

PAN-AFRICAN HEALTH CONFERENCE PROPOSALS.

Mr. MATHERS: asked the Secretary of State for Foreign Affairs whether any steps have been taken in pursuance of the suggestion, made by the Pan-African Conference at Johannesburg, that an African commission should be set up by the health committee of the League of Nations; and that periodical health conferences should be held in Africa at which the question of nutrition would be discussed?

The PRIME MINISTER: I understand that certain proposals of the Pan-African Health Conference have been submitted to the Council of the League of Nations by the health committee in a report to be considered at the Council meeting which opens to-day.

Mr. PALING: Is the right hon. Gentleman aware that there has been an inquiry into malnutrition in this country, and that about 7,000,000 people are suffering from malnutrition? What does he propose to do about that?

BRITISH REPRESENTATIVES.

Mr. COCKS: asked the Prime Minister who will represent the British Government at the forthcoming meeting of the League of Nations?

The PRIME MINISTER: My right hon. Friend the Secretary of State for Foreign Affairs accompanied by my Noble Friend the Parliamentary Under-Secretary of State for Foreign Affairs.

Mr. COCKS: Will the Prime Minister say whether, in any question in relation to the Italo-Ethiopian dispute, these representatives of the British Government will be acting under the instructions of the Cabinet, or will be given a free band?

The PRIME MINISTER: There is a telephone, and communications are quite easy.

Oral Answers to Questions — DARDANELLES.

Mr. PURBRICK: asked the Secretary of State for Foreign Affairs whether the Government have decided what attitude they will take with the League of Nations in regard to the request of Turkey to refortify the Dardanelles; and what that attitude will be?

The PRIME MINISTER: His Majesty's Government in the United Kingdom are still examining the proposals made by the Turkish Government for the refortification of the Dardanelles, and I am therefore unable to add anything to the statement made by my right hon. Friend on 21st April last.

Mr. PURBRICK: Will the Government bear in mind that the Turkish Government, for giving up the right to fortify the Dardanelles, received certain concessions of territory, and that if any question of allowing them to fortify the Dardanelles comes up, they will see that they return these territories?

The PRIME MINISTER: I regret I was unable to catch all that my hon. Friend said, but, of course, the question of the fortification of the Dardanelles is not one exclusively for this country. It is one for all those countries concerned in the Treaty in which the relations concerning the Dardanelles were laid down. We can take no action without consultation with the other parties.

Oral Answers to Questions — EASTERN MEDITERRANEAN.

Mr. COCKS: asked the Secretary of State for Foreign Affairs whether, in view of the failure of the League to prevent Italian aggression in Abyssinia, His Majesty's Government will approach the Governments of Turkey, Jugoslavia, Soviet Russia, Rumania, Greece and Bulgaria with a view to concerted action


and mutual collaboration for the preservation of peace and order in the Eastern Mediterranean?

The PRIME MINISTER: His Majesty's Government are always ready to consult, when necessary, with the other members of the League with a view to the preservation of peace.

Mr. COCKS: In view of the statement by Signor Mussolini that he has now founded an eastern Roman Empire, is it not necessary to provide some counterpoise and counterweight such as I have suggested in my question for the Eastern Mediterranean?

The PRIME MINISTER: I would not myself be in a hurry to take literally every statement made in a moment of enthusiasm.

Oral Answers to Questions — AUSTRIA (CONSCRIPTION).

Lieut.-Commander FLETCHER: asked the Secretary of State for Foreign Affairs whether he is now in a position to state what action His Majesty's Government propose to take in regard to the decision of Austria to introduce conscription?

The PRIME MINISTER: I have nothing to add to the replies returned to the hon. and gallant Member on 27th and 30th April and to my hon. and gallant Friend the Member for Chatham (Captain Plugge) on 29th April.

Oral Answers to Questions — DR. HANS WESEMANN (TRIAL).

Mr. A. HENDERSON: asked the Secretary of State for Foreign Affairs whether he is aware that a German subject, Dr. Hans Wesemann, was sentenced on 6th May, 1936, in Basle, to three years' imprisonment on the charge of kidnapping and conveying across the German frontier a journalist named Dr. Jacob, a German refugee enjoying the right of asylum in Switzerland; that in the course of the trial it was disclosed that the accused's activities were known to the late German Ambassador in London, to Prince Bismarck, the German Charge d'Affaires in London, and that the accused often conferred with Baron Marschall, Secretary of the German Embassy in London; and whether the Minister has any statement to make on this subject?

The PRIME MINISTER: My right hon. Friend is expecting a full report on the trial in question from His Majesty's Minister at Berne, and in the meantime I am not able to make a statement on the subject, as my information is at present derived solely from the Press.

Mr. HENDERSON: Having regard to the fact that the statement was contained in the "Times," which is a paper which gives great support to the right hon. Gentleman, will he not accept that statement and convey a representation to the German Embassy that this country does not approve of Embassies being used for the purpose of co-operating with secret police?

The PRIME MINISTER: No one has more respect for the Press than I have, but I must rely on official reports in a case of this kind, and I am afraid I have nothing to add to what I have already said.

Sir ARCHIBALD SINCLAIR: In view of the public interest that is taken in this question, will the right hon. Gentleman make the result of his investigations known to the public and to this House?

The PRIME MINISTER: If a question is asked, my right hon. Friend knows that no one is more delighted than I to give an answer.

Miss WILKINSON: asked the Secretary of State for the Home Department whether his attention has been called to the evidence given in the Wesemann case at Basle; and whether, in view of the connections there established between the activities of Herr Wesemann and the German Embassy in this country, he pro-proses to take similar action to that taken by his predecessor in the case of Arcos?

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): My right hon. Friend has seen only newspaper reports of the trial, and is not in a position to make any comment on the first part of the question. The answer to the second part of the question is in the negative.

Miss WILKINSON: In view of the fact that the right hon. Gentleman's predecessor Lord Brentford had far less ground to go on than sworn statements in a court of law, as reported in a reputable British newspaper, is it not about time


that the Government began to take some notice of this abuse of diplomatic privilege?

Lieut.-Colonel MOORE: Is it not a fact that the evidence given in this case implicating the German Embassy was given only by Wesemann himself, and was unconfirmed from any other source?

Oral Answers to Questions — NAVAL AND MILITARY PENSIONS AND GRANTS.

Major LEIGHTON: asked the Minister of Pensions whether he has any information showing the relation between rates of disability pensions, wages, and the cost of living in Great Britain and in the other chief belligerents of the late War?

The MINISTER of PENSIONS (Mr. R. S. Hudson): As detailed figures are

Country.
100 per cent. Pension Standard or Flat Rate. (Per week.)
Percentage of Pension to average weekly wage.
Purchasing power of Pension in 1935 compared with purchasing power in 1920. (1920=100.)






Per cent.



United Kingdom
…
…
40s.
73·9
174·5


Australia
…
…
42s.
49·75
128·1


Canada
…
…
$17·26
62·3
155


New Zealand
…
…
40s.
48·1
135·4


France
…
…
120 Frs.
62·8
130·3


United States of America
…
…
$23·02
62·2
146·7

Oral Answers to Questions — MILK MARKETING.

Brigadier-General CLIFTON BROWN: asked the Minister of Agriculture whether the Milk Board will implement the conclusions arrived at by the committee of investigation forthwith, or whether he is making an Order to vary the recommendations of the committee in some respects?

The MINISTER of AGRICULTURE (Mr. Elliot): I gave notice on 6th May to the Milk Marketing Board of the action I propose to take with regard to the recent report of the Committee of Investigation for England, and have informed the board that, as required by Statute, I will consider any representations they may wish to make within 14 days from the date of the notice. After

Involved, I will, with permission, circulate the reply in the OFFICIAL REPORT, and will arrange for a chart to be placed in the tea room. I may say, however, that they show that the Imperial pensioner is at substantial advantage both in regard to cost of living and in relation to current wage rates by comparison with the pensioner in other countries?

The information is as follows:

The figures are based on particulars published by the International Labour Office, but in view of the known difficulties in the way of exact comparison between different countries they must be regarded as approximate only.

It has not been found practicable to include comparative figures for Germany owing to the extreme fluctuations in the value of currency in post-war years and the fact that since 1932 wages have been subject to arbitrary percentage reductions.

this date I will, of course, inform the House of the final decision reached.

Oral Answers to Questions — TITHE BILL.

Mr. DENMAN: asked the Minister of Agriculture what was the sum paid by the Commissioners of Crown Lands in the last financial year in respect of tithe; and how much do they expect to gain by the Tithe Bill?

Mr. ELLIOT: As the answer involves a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.

Following is the answer:

In the financial year ended 31st March last, the total gross amount paid by the Commissioners of Crown Lands in respect


of tithe was £1,862 17s. 4d. The Commissioners also received tithe in other cases amounting to £486 12s. 7d. As regards the second part of the question, the following figures show what would be the approximate effect of the provisions of the Tithe Bill assuming that all the land concerned was agricultural land. I regret that in the short time available it has not been possible to carry out the detailed investigation necessary to separate the tithe paid and received by the Commissioners into the various categories, although, as my hon. Friend will appreciate, in any final calculation Allowance would have to be made, for example, for tithe charged on nonagricultural land.

Per annum.



£


Gross gain on tithe paid
282


Loss on tithe received
62


Net gain to Commissioners
220

Oral Answers to Questions — RIVER POLLUTION.

Mr. SHORT: asked the Minister of Agriculture (1) whether he is aware of the pollution of rivers by the waste water of sugar-beet factories; whether the Water Pollution Research Board have discovered any simple and practical process by which these waste waters can be purified; and, if so, will he call the attention of sugar-beet factories to this fact, with a view to the discontinuance of such pollution;
(2) whether he is aware of the constant pollution of inland waterways by the effluents from dairies and factories manufacturing milk products; whether the Water Pollution Research Board have discovered processes by which these effluents can be purified; and, if so, will he call the attention of such factories to these processes in the interests of anglers and the preservation of cleanliness and the purity of our water supplies?

Mr. ELLIOT: The Ministry has no powers in regard to the prevention and control of river pollution, which is a matter primarily for the local sanitation authorities or fishery boards. I am aware, however, that pollution does occur in some cases. As regards sugar-beet, the Water Pollution Research Board advised in 1931 that the problem of pollution by

sugar-beet factories could be largely, and in many cases completely, solved by modifications in the factory processes and by simple methods of treatment of the waste waters so that the waters could be reused in the factory. These conclusions were communicated to the industry and I understand that a number of factories have taken effective steps to prevent pollution. The British Sugar Corporation, which will take over control of the beet-sugar factories if Parliament approves the proposals in the Sugar Industry (Reorganisation) Bill, may be expected to give careful attention to this problem. As regards dairy and milk product factories, I understand that the Water Pollution Research Board has for some months been conducting experiments ion effluent treatment with the financial co-operation of the industry. I have every hope that these experiments, with the progress of which the industry is being kept in close touch, will lead in the near future to useful practical results.

Oral Answers to Questions — POST OFFICE

TELEGRAPH AND TELEPHONE POLES.

Mr. DAY: asked the Postmaster-General the number of telegraph and telephone poles purchased by the General Post Office during the three years ended December, 1935, from Norway, Sweden, Finland, Poland, and Latvia?

The POSTMASTER-GENERAL (Major Tryon): The total number of telegraph and telephone poles purchased from the countries in question during the three years ended December, 1935, was 269,026, made up as follows:—Norway, 59,902; Sweden, 45,505; Finland, 153,621; Poland, 2,783; Latvia, 7,215.

Mr. DAY: Is it not possible to obtain these poles from the Empire overseas?

Major TRYON: We have not had offers from some of the Dominions, but we shall be very happy to consider any that come.

AIR MAILS (SCANDINAVIA).

Mr. LEWIS: asked the Postmaster-General on what grounds it was decided that a contract for carrying British air mails to Scandinavia should be entered into before any regular British service of aeroplanes between this country and Scandinavia had been inaugurated?

Major TRYON: I would refer the hon. Member to the answer which I gave to the hon. and gallant Member for Hertford (Sir M. Sueter) on 5th March of this year.

Mr. LEWIS: Can my right hon. and gallant Friend give the House any other example of the granting to a private company of a contract to carry mails, whether by sea, by land, or by air, before any regular service has been inaugurated by the company?

Major TRYON: It seems to me that if there has been no regular service, it was time we had one and I am very glad to have established one.

IRISH SWEEPSTAKE.

Sir W. DAVISON: asked the Postmaster-General whether he will state his statutory authority for refusing to convey a letter addressed to the Irish Free State containing 10s. for a ticket in the Irish Hospitals Sweepstake for the use of the sender, and not for sale or distribution; and, as this is a legal transaction, under what circumstances does the Post Office differentiate it from cheques sent to bookmakers to place on horse races or in connection with football pools?

Major TRYON: The sale and distribution in this country of tickets in the Irish Sweepstake is unlawful and, as has been explained in reply to previous questions, the use of the post cannot be allowed to facilitate the distribution of tickets in this country by the promoters of the lottery.

Sir W. DAVISON: Is my right hon. and gallant Friend not aware that I specially said in my question that it was not for distribution in this country; is he aware that the Home Secretary in 1935 informed the House that it was not an offence for a man himself to send 10s. to Dublin for a ticket; and is he aware that that is the case in regard to which I have asked for information?

Major TRYON: I acted under the power of a warrant issued by the Home Secretary.

Sir W. DAVISON: But is my right hon. and gallant Friend aware that the case to which I have drawn his attention is the case of a ticket for the man himself, and the Home Secretary said in 1935 that that was not an illegal offence?

SUB-OFFICE, WESTON RHYN.

Major LEIGHTON: asked the Postmaster-General whether the case of embezzlement, extending over some years, by the late sub-postmaster at Weston Rhyn has been brought to his notice; whether he is aware that the position is now being offered at the remuneration of £2 3s. per week, out of which office accommodation, fittings, heating, and lighting have to be provided; and is he satisfied that this wage is adequate for a person who has public money in his trust?

Major TRYON: My attention has been drawn to the case. The pay of sub-postmasters is determined by the volume of business transacted at their offices. At the smaller offices the Post Office work does not afford full-time employment, and the pay is not intended to provide the sole means of livelihood. The rates have been settled in agreement with the sub-postmasters' representatives. The post in question has recently been filled, and as there were more than 20 applicants there appear to be no grounds for supposing that the salary is incommensurate with the duties and responsibilities.

Oral Answers to Questions — BRITISH BROADCASTING CORPORATION.

TELEVISION (ALEXANDRA PALACE).

Mr. R. C. MORRISON: asked the Postmaster-General whether he will approach the British Broadcasting Corporation with a view to obtaining an invitation for Members of Parliament to visit Alexandra Palace in order to inspect the progress of the preparations for television?

Major TRYON: I will convey the hon. Member's suggestion to the British Broadcasting Corporation.

Mr. R. C. MORRISON: asked the Postmaster-General when the transmission of television programmes from Alexandra Palace is likely to commence?

Major TRYON: I am informed that the structural work at Alexandra Palace is nearly completed and that the installation of the apparatus is proceeding. So soon as this is completed, there will naturally ensue a period of engineering tests. Following that, possibly in July,


trial programes will begin. These will not, I understand, be elaborate in character, but will be intended to give the British Broadcasting Corporation experience in operation and the trade an opportunity of testing reception. The transmission of a full programme service may be expected in the autumn.

GOVERNMENT'S PROPOSALS.

Mr. DAY: asked the Prime Minister whether he proposes to ask the House to consider any new arrangement with the British Broadcasting Corporation, involving a new agreement between them and the General Post Office; and will he give particulars?

The PRIME MINISTER: Yes, Sir. I hope there will before long be an opportunity for a further discussion of this matter, at which the Government's proposals will be put before the House.

Mr. DAY: Will any provision be made for a grand opera grant?

The PRIME MINISTER: Will the hon. Member be good enough to put that on the Paper?

Oral Answers to Questions — UNEMPLOYMENT.

TEMPORARY WORK (COLCHESTER).

Mr. LEWIS: asked the Minister of Labour whether he will cause inquiry to be made into the circumstances in which a dozen men engaged at the military hospital, Colchester, as temporary employés in October, 1935, and on certain subsequent dates, were informed by the manager of the local Employment Exchange that the said employment was insurable employment and, after stamps had been affixed to their cards until the beginning of March in this year, were afterwards informed that the work in question was not insurable work and that they must, in consequence, receive back the amount contributed in stamps for insurance; and what the position of these men will be in the event of their now voluntarily leaving this employment?

The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Lieut.-Colonel Muirhead): My right hon. Friend's attention has been drawn to the case referred to. Inquiries are being made, and I will let my hon. Friend know the result so soon as they are complete.

REGULATIONS.

Mr. R. D. ACLAND: asked the Minister of Labour whether he can now state at what date the unemployment regulations will be presented to Parliament?

Lieut.-Colonel MUIRHEAD: I cannot add to previous replies on this subject.

Mr. ACLAND: Can the hon. and gallant Gentleman give an assurance that whenever the regulations are brought forward, a proper period will be allowed to elapse between their publication and their discussion by this House?

Lieut.-Colonel MUIRHEAD: I think that the hon. Member can rest assured about that.

Mr. SHINWELL: Is the Minister aware that summer has now arrived?

Lieut.-Colonel MUIRHEAD: I believe so.

Mr. SHINWELL: If the hon. and gallant Gentleman believes that summer has arrived, why did he determine the answer to this question on the probability of spring coming shortly?

Lieut.-Colonel MUIRHEAD: If the hon. Member has studied the National Government's election address, he will see that we said spring at the earliest.

Mr. GEORGE GRIFFITHS: Has the hon. and gallant Gentleman seen in the Press that 20th May is the date when the regulations will be made known?

Oral Answers to Questions — ROYAL NAVY (BATTLESHIP CONSTRUCTION).

Mr. STUART RUSSELL: asked the Parliamentary Secretary to the Admiralty whether contracts have yet been given for the construction of the two battleships of the 1936 programme; if not, when the allocation of these contracts may be expected?

The CIVIL LORD of the ADMIRALTY (Mr. Kenneth Lindsay): The answer to the first part of the question is in the negative. As regards the second part, no definite date can be given at present, but it will be several months before the design drawings can be sufficiently advanced for tendering purposes.

Sir P. HARRIS: What do the Government propose to do with the £425,000 which they have asked the House to vote if there is to be no contract this year?

Mr. LINDSAY: In order to take some preliminary steps which are necessary before battleships are built.

Sir P. HARRIS: Is it suggested that the preliminary steps will cost £425,000?

Mr. LINDSAY: Yes.

Oral Answers to Questions — SCOTLAND (WATER SUPPLY, SHERWOOD).

Captain RAMSAY: asked the Secretary of State for Scotland whether he is aware that occupants of a certain number of houses in Bonnyrigg are being charged a water rate of about 3½d. a week, in spite of the fact that they have no water laid on in their houses and have to share with many others an outside water supply, and not always adequate; and will he take steps in the matter?

The UNDER-SECRETARY of STATE for SCOTLAND (Lieut.-Colonel Colville): I am aware that in the case of certain houses in the village of Sherwood, near Bonnyrigg, to which I assume the question relates, a charge of 3½d. per week in respect of water supply is made by the Lothian Coal Company owning the houses and that water has not vet been introduced into the houses. The county council are, however, in communication with the company on the question of improvements in the houses, including the introduction of water, and I shall keep my hon. and gallant Friend informed of developments.

Captain RAMSAY: In view of the fact that this situation has been going on for a long time and that these people have been continuing to pay water rate when they have had no water, and in view also of the fact that the subject is rather confused by the question of certain houses getting priority in regard to baths, will my hon. and gallant Friend see that a supply of water to these houses is made one of priority?

Lieut.-Colonel COLVILLE: I will note what my hon. and gallant Friend says,

but I can assure him that the Department of Health are in touch with the county council, and we are doing all we can to expedite the matter.

Oral Answers to Questions — BUDGET PROPOSALS; ALLEGED LEAKAGE (TRIBUNAL OF INQUIRY).

Mr. THURTLE: asked the Attorney-General whether he will, by means of a statement in the House, direct the attention of all concerned as to where information bearing upon the alleged leakage of Budget secrets should be sent for the use of the judicial Tribunal of Inquiry?

Sir GEORGE PENNY (Treasurer of the Household): I have been asked to reply. My hon. and learned Friend would refer the hon. Member to the statement issued by the Home Secretary, which was published in the "Times" of 7th May, that
any communications on the subject of the Tribunal's Inquiry should be addressed to the Secretary of the Tribunal at the Royal Courts of Justice.

Oral Answers to Questions — PALESTINE (DISTURBANCES).

Sir P. HARRIS: asked the Secretary of State for the Colonies whether he has any statement to make on the riots in Palestine; whether troops have been sent from Egypt to deal with same; and what is the most recent information on the situation?

Sir G. PENNY: I have been asked to reply. Some minor breaches of the peace have been reported since the statement which my right hon. Friend made on 6th May, and the Arab strike continues. As a precautionary measure the Palestine garrison has been temporarily reinforced.

Oral Answers to Questions — SCHOOL CHILDREN (CONVEYANCE).

Mr. de ROTHSCHILD: asked the President of the Board of Education, whether he has considered representations submitted by county education authorities to the effect that the Exchequer contribution towards the cost of conveying children to school in cases where they reside more than three miles from the nearest school should be increased from 20 per cent. to 50 per cent.; and whether he has yet taken a decision in the matter?

The PRESIDENT of the BOARD of EDUCATION (Mr. Oliver Stanley): As announced in Circular 1444 of 6th January, 1936, it is proposed to increase the rate of grant payable on the conveyance of school children to elementary schools from 20 per cent. to 40 per cent. as from 1st April, 1937.

Mr. de ROTHSCHILD: Can the right hon. Gentleman see his way to bring this measure in earlier so that it will be ready for use next winter, instead of waiting until the spring?

Mr. STANLEY: All the circumstances were considered before the circular was issued, and I cannot undertake to reconsider it.

Mr. LEACH: Is it too late to ask the Minister to alter the percentage from 40 to 50?

Mr. STANLEY: Yes, Sir.

Oral Answers to Questions — BRITISH ARMY.

MARRIAGE ALLOWANCE.

Mr. WHITELEY: asked the Secretary of State for War whether he is aware that married soldiers under 26 years of age, serving overseas, receive no marriage allowance; and whether he will have inquiries made, with a view to all married soldiers serving overseas being granted a marriage allowance and avoiding their wives having to apply to public assistance committees for out-door relief?

The FINANCIAL SECRETARY to the WAR OFFICE (Sir Victor Warrender): The age qualification for the grant of marriage allowance is 26 years, whether the soldier is serving at home or abroad. My right hon. Friend is aware of the considerations urged in regard to this matter, but is not prepared to reduce the age limit, which was decided upon after the most careful consideration of the requirements of the three Service Departments. I would point out that the enlistment of married men under the the age of 26 years is forbidden, and unmarried soldiers are fully aware that if they marry below the requisite age they will not receive marriage allowance.

Mr. WHITELEY: Is the hon. Gentleman prepared to issue instructions that

nobody will be entitled to enter the Army until he is 26 in order that he can get the full benefits?

Mr. SHINWELL: Is it a good thing that the wives of soldiers should have to apply to the public assistance committees for help?

Sir V. WARRENDER: It is also not a particularly good thing that all our young soldiers should be married men.

BREN MACHINE-GUN.

Mr. STUART RUSSELL: asked the Secretary of State for War whether the production of the new Bren machine-gun has now commenced; and, if so, whether this gun is being constructed exclusively at Government factories?

Sir V. WARRENDER: Preparations for the manufacture of the Bren light machine-gun at the Royal Small Arms Factory, Enfield, have begun. At present no arrangements have been made for the manufacture of the gun elsewhere, but it may be necessary to obtain certain components from trade firms.

TITHE.

Mr. DENMAN: asked the Secretary of State for War whether tithe is paid in respect of land owned by the War Office; and, if so, what was the amount paid in the last financial year?

Sir V. WARRENDER: Yes, Sir. The amount so paid in the last financial year was approximately £2,500.

Oral Answers to Questions — SOUTH WALES (INTIMIDATION).

Sir WALDRON SMITHERS: asked the Home Secretary whether, in view of the disclosures made in the course of the trials at the Glamorgan assizes, on 25th March, which resulted in the conviction of 55 persons, the Government will institute a full inquiry into the whole circumstances in South Wales which led up to the trials with a view to putting an end to the organised persecution and intimidation of persons in that district?

Mr. LLOYD: His Majesty's Government are fully aware of the circumstances in South Wales and my right hon. Friend does not think that there is any need for an inquiry such as that suggested by my hon. Friend. The Home Office is in close


touch with the chief officers of police, who are responsible for maintaining law and order in the district, and my right hon. Friend is satisfied that those officers are keeping a close watch on the situation and will provide protection where necessary.

Sir W. SMITHERS: Is the hon. Gentleman aware that anyone in South Wales who is not in sympathy with the extremists is subjected to continued violence and intimidation, and are the Government going to take no steps to stop such a condition of things in Great Britain?

Mr. E. J. WILLIAMS: Is the hon. Member aware that there are Members of Parliament who support the present Government financing these organisations that are causing malcontent?

Oral Answers to Questions — ESTATE DUTY (TITHE).

Mr. R. D. ACLAND: asked the Chancellor of the Exchequer whether he will give, in relation to any recent examples, what has been the relation between the valuation of lay tithe for Death Duty purposes and the gross annual value of the same lay tithe?

The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): Only an insignificant proportion of the total tithe rentcharge passes on death and the valuation for purposes of Estate Duty of tithe so passing normally varies between 10 and 12 times the gross annual value. It has, however, been as low as six times in special cases, for example, where the

tithe is small in amount and subject to difficulties of collection.

Mr. ACLAND: Can the hon. and learned Gentleman say what has been the highest in recent cases? He has given the lowest.

Mr. MORRISON: No, Sir, I have given the hon. Member the normal practice. If he wishes for the highest figures, I would ask him to put down a question.

Mr. ACLAND: asked the Chancellor of the Exchequer the factors which are taken into consideration in calculating the value of lay tithe for death duty purposes; and how the calculation is made?

Mr. MORRISON: The principal value for purposes of Estate Duty of lay tithe passing upon death falls to be determined in accordance with the provisions of Section 7 (5) of the Finance Act, 1894. That value, which is the value which the tithe would realise if sold in the open market, is normally computed by capitalising at an appropriate number of year's purchase the amount of tithe payable, less a deduction in respect of rates, Land Tax, cost of obligation (if any) to repair the chancel and an estimated amount for cost of collection.

BUSINESS OF THE HOUSE.

Motion made, and Question put,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

The House divided: Ayes, 211; Noes, 79.

Division No. 173.]
AYES.
[3.34 p.m.


Acland, Rt. Hon. Sir F. Dyke
Boulton, W. W.
Clarry, Sir Reginald


Acland, R. T. D. (Barnstaple)
Bowater, Col. Sir T. Vansittart
Clydesdale, Marquess of


Acland-Troyte, Lt.-Col. G. J.
Bower, Comdr. R. T.
Cobb, Sir C. S.


Adams, S. V. T. (Leeds, W.)
Bowyer, Capt. Sir G. E. W.
Colville, Lt.-Col. D. J.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Brass, Sir W.
Cook, T. R. A. M. (Norfolk, N.)


Amery, Rt. Hon. L. C. M. S.
Brown, Rt. Hon. E. (Leith)
Cooke, J. D. (Hammersmith, S.)


Anstruther-Gray, W. J.
Brown, Brig.-Gen. H. C. (Newbury)
Croft, Brig.-Gen. Sir H. Page


Aske, Sir R. W.
Browne, A. C. (Belfast, W.)
Crookshank, Capt. H. F. C.


Assheton, R.
Bull, B. B.
Cross, R. H.


Astor, Hon. W. W. (Fulham, E.)
Burgin, Dr. E. L.
Crossley, A. C.


Baldwin, Rt. Hon. Stanley
Burton, Col. H. W.
Culverwell, C. T.


Balfour, Capt. H. H.(Isle of Thanet)
Butler, R. A.
Davles, Major G. F. (Yeovil)


Barclay- Harvey, C. M.
Calne, G. R. Hall.
Davison, Sir W. H.


Baxter, A. Beverley
Cartland, J. R. H.
Dawson, Sir P.


Beauchamp, Sir B. C.
Cary, R. A.
De la Bère, R.


Beaumont, Hon. R. E. B. (Portsm'h)
Cayzer, Sir C. W. (City of Chester)
Denman, Hon. R. D.


Beit, Sir A. L.
Cayzer, Sir H. R. (Portsmouth, S.)
Donner, P. W.


Bernays, R. H.
Chamberlain, Rt. Hn. Sir A. (Br.W.)
Drewe, C.


Bird, Sir R. B.
Chamberlain. Rt. Hn. N. (Edgb't'n)
Dugdale, Major T. L.


Blair, Sir R.
Channon, H.
Duggan, H. J.


Blaker, Sir R.
Chapman, A. (Rutherglen)
Duncan, J. A. L.


Bossom, A. C.
Chorlton, A. E. L.
Dunglass, Lord




Eckersley, P. T.
Levy, T.
Ross Taylor, W. (Woodbridge)


Elliot, Rt. Hon. W. E.
Lewis, O.
Rothschild, J. A. de


Ellis, Sir G.
Liddall, W. S.
Russell, A. West (Tynemouth)


Elliston, G. S.
Lindsay, K. M.
Russell, S. H. M. (Darwen)


Emmott, C. E. G. C.
Llewellin, Lieut.-Col. J. J.
Salmon, Sir I.


Emrys-Evans, P. V.
Lloyd, G. W.
Samuel, Sir A. M. (Farnham)


Erskine Hill, A. G.
Locker-Lampson, Comdr. O. S.
Samuel, M. R. A. (Putney)


Evans, D. O. (Cardigan)
Loftus, P. C.
Sanderson, Sir F. B.


Ganzoni, Sir J.
Levat-Fraser, J. A.
Sandys, E. D.


Gllmour, Lt.-Col. Rt. Hon. Sir J.
Lyons, A. M.
Sovery, Servington


Gluckstein, L. H.
Mabane, W. (Huddersfield)
Scott, Lord William


Goldie, N. B.
MacAndrew, Colonel Sir C. G.
Seely, Sir H. M.


Goodman, Col. A. W.
MacDonald, Rt. Hn. J. R. (Scot. U.)
Selley, H. R.


Gower, Sir R. V.
MacDonald, Rt. Hon. M. (Ross)
Shakespeare, G. H.


Graham, Captain A. C. (Wirral)
McEwen, Capt. J. H. F.
Shaw, Major P. S. (Wavertree)


Granville, E. L.
McKie, J. H.
Sinclair, Rt. Hon. Sir A. (C'thn's)


Grattan-Doyle, Sir N.
Maclay, Hon. J. P.
Smiles, Lieut.-Colonel Sir W. D.


Gridley, Sir A. B.
Macnamara, Capt. J. R. J.
Smith, Bracewell (Dulwich)


Grimston, R. V.
Margesson, Capt. Rt. Hon H. D. R.
Smith, Sir R. W. (Aberdeen)


Guest, Hon. I. (Brecon and Radnor)
Mason, Lt.-Col. Hon. G. K. M.
Smithers, Sir W.


Guinness, T. L. E. B.
Mayhew, Lt.-Col. J.
Somerville, A. A. (Windsor)


Guy, J. C. M.
Meller, Sir R. J. (Mitcham)
Southby, Comdr. A. R. J.


Hamilton, Sir G. C.
Mills, Sir F. (Leyton, E.)
Spender-Clay Lt.-Cl. Rt. Hn. H. H.


Hannah, I. C.
Mitchell, H. (Brentford and Chiswick)
Stanley, Rt. Hon. Oliver (W'm'l'd)


Hannon, Sir P. J. H.
Mitchell, Sir W. Lane (Streatham)
Stewart, William J. (Belfast, S.)


Harris, Sir P. A.
Moore, Lieut.-Col. T. C. R.
Stourton, Hon. J. J.


Hartington, Marquess of
Morgan, R. H.
Stuart, Hon. J. (Moray and Nairn)


Haslam, Sir J. (Bolton)
Morris-Jones, Dr. J. H.
Sueter, Rear-Admiral Sir M. F.


Hellgers, Captain F. F. A.
Morrison, G. A. (Scottish Univ's.)
Tate, Mavis C.


Hepburn, P. G. T. Buchan-
Morrison, W. S. (Cirencester)
Thomas, J. P. L. (Hereford)


Herbert, A. P. (Oxford U.)
Muirhead, Lt.-Col. A. J.
Titchfield, Marquess of


Herbert, Major J. A. (Monmouth)
Munro, P.
Touche, G. C.


Hills, Major Rt. Hon. J. W. (Ripon)
Neven-Spence, Maj. B. H. H.
Tree, A. R. L. F.


Holmes, J. S.
Nicolson, Hon. H. G.
Tryon, Major Rt. Hon. G. C.


Hope, Captain Hon. A. O. J.
Ormsby-Gore, Rt. Hon. W. G.
Tufnell, Lieut.-Com. R. L.


Howitt, Dr. A. B.
Orr-Ewing, I. L.
Wakefield, W. W.


Hudson, R. S. (Southport)
Palmer, G. E. H.
Wallace, Captain Euan


Jackson, Sir H.
Peake, O.
Warrender, Sir V.


James, Wing-Commander A. W.
Petherick, M.
Waterhouse, Captain C.


Joel, D. J. B.
Pickthorn, K. W. M.
wedderburn, H. J. S.


Keeling, E. H.
Pilkington, R.
Williams, H. G. (Croydon, S.)


Kerr, J. Graham (Scottish Univs.)
Ponsonby, Col. C. E.
Wilton, Lt.-Col. Sir A. T. (Hitchin)


Kimball, L.
Pownall, Sir Assheton
Windsor-Clive, Lieut.-Colonel G.


Kirkpatrick, W. M.
Ramsay, Captain A. H. M.
Womersley, Sir W. J.


Knox, Major-General Sir A. W. F.
Ramsbotham, H.
Young, A. S. L. (Partick)


Lamb, Sir J. Q.
Rathbone, Eleanor (English Univ's.)



Lambert, Rt. Hon. G.
Reid, W. Allen (Derby)
TELLERS FOR THE AYES.—


Law, R, K. (Hull, S.W.)
Remer, J. R.
Sir George Penny and Lieut.-Colone


Leech, Dr. J. W.
Roberts, W. (Cumberland, N.)
Sir A. Lambert Ward.


Leighton, Major B. E. P.
Ross, Major Sir R. D. (L'nderry)





NOES.


Adamson, W. M.
Hall, J. H. (Whitechapel)
Naylor, T. E.


Attlee, Rt. Hon. C. R.
Hardle, G. D.
Paling, W.


Banfield, J. W.
Henderson, A. (Kingswinford)
Parker, H. J. H.


Barr, J.
Henderson, T. (Tradeston)
Potts, J.


Batey, J.
Holland, A.
Ritson, J.


Benson, G.
Hopkin, D.
Shinwell, E.


Brooke, W.
Jagger, J,
Short, A.


Burke, W. A
Jenkins, A. (Pontypool)
Silverman, S. S.


Charleton, H. C.
Johnston, Rt. Hon. T.
Simpson, F. B.


Chater, D.
Jones, A. C. (Shipley)
Smith, Ben (Rotherhithe)


Cluse, W. S.
Jones, Morgan (Caerphilly)
Smith, Rt. Hon. H. B. Lees- (K'ly)


Clynes, Rt. Hon. J. R.
Kelly, W. T.
Taylor, R. J. (Morpeth)


Cocks, F. S.
Kennedy, Rt. Hon. T.
Thorne, W.


Cove, W. G.
Leach, W.
Thurtle, E.


Daggar, G.
Lee, F.
Tinker, J. J.


Dalton, H.
Leslie, J. R.
Viant, S. P.


Davies, R. J. (Westhoughton)
Logan, D. G.
Walker, J.


Davies, S. O. (Merthyr)
Lunn, W.
Watkins, F. C.


Day, H.
Macdonald, G. (Ince)
Wilkinson, Ellen


Dunn, E. (Rother Valley)
McEntee, V. La T.
Williams, E. J. (Ogmore)


Ede, J. C.
McGhee, H. G.
Wilson, C. H. (Attercliffe)


Edwards, Sir C. (Bedwellty)
MacLaren, A.
Windsor, W. (Hull, C.)


Fletcher, Lt.-Comdr. R. T. H.
Mainwaring, W. H.
Woods, G. S. (Finsbury)


Gallacher, W.
Marklew, E.
Young, Sir R. (Newton)


Gardner, B. W.
Marshall, F.



Garro-Jones, G. M.
Mathers, G.
TELLERS FOR THE NOES.—


Green, W. H. (Deptford)
Montague, F.
Mr. Whiteley and Mr. Groves.


Griffiths, G. A. (Hemsworth)
Morrison, R. C. (Tottenham, N.)



Question, "That the Clause stand part of the Bill," put, and agreed to.

SELECTION (STANDING COMMITTEES).

STANDING COMMITTEE C.

Sir Henry Cautley reported from the Committee of Selection; That they had discharged the following Member from Standing Committee C: Lieut.-Colonel Sir Arnold Wilson; and had appointed in substitution: Dr. Leech.

Sir Henry Cautley further reported from the Committee; That they had discharged the following Member from Standing Committee C (added in respect of the Midwives Bill): Miss Cazalet; and had appointed in substitution: Mr. Henry Strauss.

Reports to lie upon the Table.

GAS LIGHT AND COKE COMPANY (No. 2) BILL.

The Chairman of Ways and Means, in pursuance of Standing Order 91, reported to the House a special circumstance relative to the Gas Light and Coke Company (No. 2) Bill, viz.: "That the Committee on Group F of Private Bills found the Preamble of the Bill proved without having fully heard all the Petitioners against the said Bill."

Report to lie upon the Table.

Orders of the Day — SPECIAL AREAS RECONSTRUCTION (AGREEMENT) BILL.

Considered in Committee.

[Sir DENNIS HERBERT in the Chair.]

CLAUSE 1.—(Power of Treasury to enter into and make payments under an agreement.)

The following Amendments stood upon the Order Paper: In page 2, line 11, leave out "written "; in line 11, leave out "the Treasury," and insert "Parliament."—[Mr. Mabane.]

3.44 p.m.

Mr. MABANE: On a point of Order. May I ask whether it would not be more convenient if I dealt with both of my Amendments together?

The CHAIRMAN: Quite clearly the two Amendments are dependent upon one another, and may both be discussed as one when the hon. Member moves the first of them.

Mr. MABANE: I beg to move, in page 2, line 11, to leave out "written."
I agree with the general purpose of the Bill to lend small amounts of capital to start businesses, but I am by no means sure that the Bill is the best way of achieving that purpose. The effect of my Amendments would be to substitute the consent of Parliament for the written consent of the Treasury in the event of the capital of the company being increased. It may surprise hon. Members to know that the capital of the proposed company can be increased. Those who have followed the Debates on the Bill will appreciate that there is a great difference between the popular estimate of what the Bill does, and what is in the Bill. The popular idea is that the Bill empowers the Government, through the agency of the Treasury, to establish a company with a capital of £1,000,000 and that the company shall, for an experimental period of 10 years, lend money to those who desire to set up businesses in the depressed areas but otherwise would be unable to obtain the capital. Hon. Members who have read the Bill know that the Bill does something a great deal more than that, and that it is a very obscure Bill.

Sir ARTHUR MICHAEL SAMUEL: Those figures are not in the Bill.

Mr. MABANE: The hon. Member will appreciate that that is exactly the point I am making. I am pointing out that the Chancellor of the Exchequer has been conveying to the House that the Bill is for an experimental period of 10 years and that the capital is £1,000,000. Apparently the hon. Member has not yet read the Bill, or he would appreciate that there is nothing about that in the Bill.

Sir A. M. SAMUEL: I agree.

Mr. MABANE: It is a very difficult Bill to understand. In his explanation, the Chancellor himself concurred that the Bill was extremely difficult.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I did not say the whole Bill.

Mr. MABANE: Not the whole Bill, but the right hon. Gentleman particularly referred to paragraph 4 of the Schedule. Hon. Members who have read it will find it is extremely difficult to understand. I presented it, together with pencil and paper, to at least half a dozen Members of this House and asked them to explain what it meant, but not one of them has been able to do so. The Chancellor has explained what it means, and we must take his explanation as being perfectly good. In the first Debate on the Financial Resolution, the hon. Member for Seaham (Mr. Shinwell) interpreted what is now paragraph 4 of the Schedule in the way in which I myself did, but the Chancellor said he was wrong and that it meant something quite different from what I must have imagined up to that time.
If we take the explanation which the Chancellor has given, there is no doubt that the Bill commits the Treasury to an ultimate total liability of £1,000,000. That was a point that occasioned some discussion in the Debate on the Financial Resolution, and that was the point on which the hon. Member for Seaham fell. He interpreted the Bill as committing the Treasury to a liability of only £250,000, and he interrupted the Chancellor to ask if that were not so. The Chancellor said that the hon. Member for Seaham was wrong, and that the total liability was £1,000,000. It is important that the Committee should appreciate that at no point


in the Bill is £1,000,000 or 10 years mentioned. The Bill commits the Treasury not merely to the liability which, we have been told by the Chancellor, is £1,000,000, although that is not stated in the Bill, but it may commit the Treasury and the State to an unlimited liability of £100,000,000, or any other figure that we may care to mention. In the Debate on the Report stage of the Financial Resolution, the Chancellor of the Exchequer said:
But if the company started with £1,000,000 capital proves to be a success there is no reason why its operations should not be extended in the future."—[OFFICIAL REPORT, 28th April, 1936; col. 874, Vol. 331.]
On the Second Reading he went further, and said:
I might mention, in further comment on one observation which I made on a previous occasion, namely, that the losses of the State through the guarantee which it gives could not exceed £1,000,000—that that, of course, remains true as long as the capital of the company is limited to £1,000,000, but if the capital were to be increased then of course that would also increase the possible losses on the part of the State."—[OFFICIAL, REPORT, 7th May, 1936; cols. 1904–5, Vol. 311.]
Therefore, I think we may take it, from the Chancellor's statement on the Second Reading, that, if the capital of the company is increased, the liability of the State will increase with that increase of capital; and that increase of capital beyond £1,000,000 may be sanctioned by the Treasury at any time without the intervention of this House. That is to say, if the company started with a capital of £1,000,000, as indicated by the Chancellor of the Exchequer, and if, having succeeded reasonably well, it desired that its capital should be increased to £50,000,000, the Treasury, by a Ministerial edict, could do that without asking this House, and the liability of the State could be increased to £50,000,000 without any sort of consent being asked. The first words of Sub-section (2) of Clause 1 are:
In the event of the capital of the company being increased with the written consent of the Treasury.
That implies that the Treasury may at any time increase the capital of the company. No doubt many Members of the House would not have the slightest objection to placing such powers in the hands of

the Chancellor of the Exchequer or the Financial Secretary to the Treasury, but I think the House must recollect that it is not legislating for one Parliament, but for all time. There may come a time when, unfortunately, hon. Members opposite may be on the Treasury Bench, and, if this Bill were on the Statute Book, there would be little need for the hon. and learned Member for East Bristol (Sir S. Cripps) to demand his Emergency Powers Bill, because he would have them virtually in this Measure. It is clear that, if the Labour party were on this side of the House, they could by a Ministerial edict increase the capital of the company, and at the same time increase the liability of the State, to an unlimited amount, and the House ought to be very chary of putting such powers into the hands of the Treasury. Indeed, I think it would be dangerous even for Parliament to assume to itself such powers, but I certainly do not think they ought to be placed in the hands of the Treasury. The Labour party, if they were on this side, could, by increasing the capital of the company, engage in what would be virtually State banking, and I think that the Committee ought to press the Chancellor to accept this Amendment, so that, in the event of its being desired to increase the capital of the company beyond the figure which the Chancellor of the Exchequer first proposed, he would have to come to the House and ask permission for that increase of capital, rather than that the House should find that the capital had been increased by a Ministerial edict, and that the House had committed itself to an expenditure far in excess of that which it had originally in mind.

3.55 p.m.

Sir A. M. SAMUEL: I approach these Amendments with the same friendly feeling as that with which I approached the Financial Resolution, but at the same time I find it very difficult to understand the Bill. It is a highly technical Measure, and I have not been able to find in it any statement of a term of years, though a term of 10 years has been mentioned. I agree with the spirit of the Bill, but I think that, as the hon. Member for Huddersfield (Mr. Mabane) has said, we want some further elucidation of the way in which the Bill will operate. The hon. Member has indicated what is in his mind


and is largely in my own mind. Unless we have some assurance that the Bill contains some precautionary provision which we do not at the moment understand or detect, it seems to me that this company might take deposits of £1,000,000, £10,000,000 or £50,000,000, and convert itself into a banking undertaking, without any apparent transgression of the terms of the Bill, and we might find that, as the hon. Member for Huddersfield has said, we had sponsored a Bill which would provide that, while the company would have a capital of £1,000,000, which might be used as a reserve against losses, as in the case of a bank, it might seek, like any bank, to get deposits from private persons, and sooner or later might develop into a national banking institution. That is a point which ought to be dealt with, and, if the Chancellor would show us where we are in the dark and where the necessary precautions are taken, it would make us feel much more satisfied.

3.57 p.m.

Mr. GARRO-JONES: If the hon. Member for Huddersfield (Mr. Mabane) had not been so obsessed by the prospect, however remote, that we on these benches might occupy the benches opposite, he could have found much more ingenious and practical reasons in favour of his Amendments than those which he has brought forward. It is strange that, when a Bill of this kind is brought forward with the avowed object of assisting the people in the depressed areas, both the hon. Member for Huddersfield and the hon. Member for Farnham (Sir A. M. Samuel) should forget all about the objects of the Bill, and express their fear and alarm lest it might damage some vested interest in the form of banking or other powerful interests.

Sir A. M. SAMUEL: I must protest against that statement. I do not know whether the hon. Member was here when the Financial Resolution was being debated, but on that occasion I was brave enough to run the risk of boring the House for half an hour in order to try to help with such views as I have as to the way in which the Bill could be made to work. I was completely in favour of it, and made some suggestions which I thought might be helpful. Therefore, I must protest against the hon. Member's observation.

Mr. GARRO-JONES: I completely absolve the hon. Member from any erroneous motive; I was referring to his whole outlook on questions of this kind. He is alarmed at the possibility of this company taking deposits, but it is much more likely to take doubtful overdrafts which the banks have had on their books for a considerable time, and which they will take the opportunity offered by the Bill to transfer to the company. I notice that the hon. Member for Huddersfield is looking surprised, but this company is going to be entitled to consider applications for money, and, if a bank has on its books a £10,000 overdraft which has been causing the manager considerable anxiety for a number of years, he can refuse to renew it, and there is nothing in the Bill to prevent the banks from unloading their dubious securities upon this company, whose losses the Treasury will guarantee. The Chancellor of the Exchequer has been singularly secretive about the operation of the company. We have had no information at all about how the board of directors is going to operate the Bill. I am extremely interested in this matter, as are other Members on this side of the House. We are not enamoured of the Bill, but we do not oppose it, because we hope it will be a useful experiment; but cannot the Chancellor of the Exchequer give us some information as to what a person who is going to get an overdraft—

The CHAIRMAN: It is perfectly true that these Amendments together cover a wide scope, but I cannot allow the hon. Member to go into details which are certainly outside the Amendments before the Committee.

Mr. GARRO-JONES: With great respect, is it not generally the practice on the first Amendment to a Clause to allow a more general discussion on the Clause than would normally be given?

The CHAIRMAN: That may be, but it is certainly the rule and one which I try to enforce, that in no circumstances are we to have a Second Reading Debate on a Bill that is in Committee.

Mr. GARRO-JONES: I, of course, bow to your Ruling, and will content myself with having stated the reason why I consider that the House of Commons should have an opportunity of watching


how this company is operated, and that the consent of the House should be given before the capital of the company is increased. I hope that in order to allay the anxiety that is felt on that score the Chancellor of the Exchequer will be so good as to give us some information as to the kind of applicant who is to get overdrafts under the Bill.

Mr. MABANE: Has the hon. Member authority to speak for his party?

Mr. GARRO-JONES: I have not consulted my party on the point at all, and I have no authority to speak for anyone, any more than the hon. Gentleman. I am giving my opinion, and I hope that the Chancellor will be so good as to tell us the kind of applicant who is to get overdrafts under this Bill, in particular we do not want to find big businesses conducting their experiments through some nominee and merely shifting part of their losses on to the State. It is absolutely vital that we should have some information as to how this board of directors is to operate in the consideration of applications for overdrafts.

4.4 p.m.

Mr. SHINWELL: I am not certain whether to express satisfaction or sorrow at finding myself in such excellent company this afternoon, particularly the company of the hon. Member for Farnham (Sir A. M. Samuel) who, as everyone knows, is a prominent financial expert.

Sir A. M. SAMUEL: I am nothing of the sort.

Mr. SHINWELL: The hon. Member is an ex-Financial Secretary to the Treasury, and if he did not gain any financial information when he occupied that honourable post, it is a very poor outlook for the present holder of that office. At all events I am extremely encouraged to find myself in such company during the Committee stage of this Bill, and I was more particularly encouraged when I listened to the speech of the hon. Member for Huddersfield (Mr. Mabane). I ventured to suggest, during the Debate on the Financial Resolution, that the Bill was one of some complexity and certainly obscure. Now I find that that obscurity was not peculiar to myself but is common to all Members. When the hon. Member

for Huddersfield suggested that the Bill might allow an increase of the capital to £100,000,000, I was more than ever encouraged, because that is precisely the kind of Bill that we on these benches desire. Our complaint against the Bill throughout has been that it is of a very limited character. On the Financial Resolution I expressed doubts as to whether the £1,000,000 was actually to be raised, and I am not quite clear now as to whether that amount will be reached. The hon. Member for Huddersfield, on the other hand, takes the view that the amount that may be raised will be much in excess of £1,000,000, and may reach £100,000,000. If there is any likelihood of the company that is to be set up increasing the capital from £1,000,000 to a larger sum, then we on these benches will be more encouraged to support the Bill.
Moreover, if it is to be understood that the capital may be increased without any unnecessary delay, without unnecessary obstacles being placed in the path, then clearly it is a Bill that is well worth supporting. We shall not oppose the provision that the Treasury may agree with the company to increase the capital. If the matter is to be left to Parliament, with consequent Parliamentary discussions and many obstacles being placed in the way, then clearly that will be of little advantage to the company in raising capital and will be of less advantage to those in the depressed areas who have made demands on the Chancellor for submission of a scheme of this kind. What I cannot understand in the speech of the hon. Member for Huddersfield is that he should impute sinister motives to the Chancellor. He seemed to suggest that the obscurity in the Bill would provide the Chancellor with an opportunity for permitting the company to raise large sums, and he accused hon. Members on the Labour benches of seeking to use their opportunities, if and when they found themselves on the Government side of the House, to proceed along those lines. Surely the hon. Member does not seriously suggest that the Chancellor would assist hon. Members on this side to commit misdemeanours, as he described them, of that sort?

Mr. MABANE: I gathered from the earlier part of the hon Member's speech that I was entirely supported by him in my view. I gathered that it was part


of the policy of the Labour party to provide as large sums as possible for this particular purpose, and that it might be quite proper for the Labour party, when in office, to raise such large sums.

Mr. SHINWELL: Exactly. That is my reason for asking the hon. Member why he imputed sinister motives to the Chancellor of the Exchequer. If the hon. Member suggests that through the medium of this limited Bill we could raise these huge sums of money for the purpose of meeting the difficulties that present themselves in the distressed areas, then I say I am more encouraged to support the Bill and to withdraw much of the opposition that I expressed in a previous Debate. But I have my doubts.

Mr. MABANE: I can only suggest that the Chancellor may perhaps incorrectly have supposed that the National Government will always be in office. If that were not so—

Mr. SHINWELL: That is an assumption which is ill-founded, in my opinion. One of these days we shall occupy the Government benches, and when that time comes we shall not come forward with what I ventured to describe previously as a very piffling and trifling Measure; we shall come forward with something very much more substantial, if the problem of the distressed areas is as acute then as it is now. On the Financial Resolution I expressed the opinion that no limit was prescribed in the Bill for the operations of the company. I never could understand why the Chancellor spoke of "10 years" as the period of the company's operations, without making any reference to that period being contained in the Bill or in the Schedule. Surely there ought to be some reference in the Bill or the Schedule to the period of the operations of the company. Reference is made in the Bill to the company being wound up at some future date. If it is to be wound up when is it to be wound up? Is it to be wound up when huge losses have been sustained and the company can no longer meet the difficulty that presents itself, or is the time of winding-up to be left in the hands of the Treasury or the Chancellor? On these points we are entitled to some enlightenment.
As regards the amount to be raised, as the hon. Member for Huddersfield said, there is considerable obscurity regarding

the power of the company to raise capital. It may be recalled that during the Debate on the Second Reading the Chancellor said, in reply to questions, that the sums to be raised by the company could be relent from time to time. He seemed to suggest that if in the first 12 months those who had obtained loans from the company were able to repay those loans, the money could be re-lent to other business undertakings. In the Bill I can see nothing that lends any colour to that view. Perhaps on that point, which is one of substance, the Chancellor may enlighten us.

4.13 p.m.

Sir GEOFFREY ELLIS: I hope that the Chancellor of the Exchequer may be induced to give us some explanation on a question of principle. I do not go quite as far as my hon. Friend who moved the Amendment. A good deal of misconception seems to have arisen on the Bill in the last quarter of an hour. I was very much amused at the way in which the hon. Member who has just spoken said, in effect, "Here we are; we are going to have lots of money for nothing."

Mr. SHINWELL: Can the hon. Member produce any evidence in support of that statement? Is it not true that hon. Members on the Labour benches have all along declared that it was very doubtful whether the money would in fact be raised?

Sir G. ELLIS: The point to my mind is whether the guarantee of the Treasury is to be given without coming back to Parliament. If the money were raised a further guarantee might be asked for a capital increase. All that we say in the Amendment is that if guarantees are to be given by the Executive in future the amount of those guarantees should not be indefinite. That is the first thing. Secondly, it is not unreasonable to ask the Chancellor to give some indication of the kind of amount that is in his mind, of the guarantee that may be required under the Bill. We do not ask any more than that. We have a very definite fear that the principle expressed in the Bill seems to allow an indefinite guarantee by the Treasury to the company that is to be formed, and to permit that without Parliament being consulted.

4.15 p.m.

Mr. KINGSLEY GRIFFITH: I must apologise to the hon. Member for


Huddersfield (Mr. Mabane) for addressing the Committee on this Amendment without having heard his speech. I do not personally share the alarm that is being expressed. My fears are entirely the other way. I am not afraid that this is going to grow into something which the House will have to check. I am afraid it is not going to do enough. This is strictly limited in one way. It is limited to certain areas. I am rather sorry that it is so strictly limited. The areas are—

The CHAIRMAN: I do not think we can discuss the areas defined by the Act on this Amendment.

Mr. GRIFFITH: I was only addressing myself to the argument that the demands on the company might grow to a very great extent and, if the area in which they can operate is limited, I was giving that as a reason why these fears are not likely to be justified.

The CHAIRMAN: That is the exact point at which I must stop the hon. Member.

Mr. GRIFFITH: It has been suggested that the Treasury control is going to be insufficient. I do not see why that should be so. I am, with reluctance, bound to admit that the Treasury control must be either in the hands which at present hold it or in those of the party above the Gangway. They seem at the moment the most likely two alternatives. I hope soon that it will be possible to provide another. I do not think that, as regards spending money on the depressed areas, anyone will accuse the present administration of having been reckless and extravagant. The hon. Member for Huddersfield was rather envisaging that the party above the Gangway might have control, but, whatever I may have thought about the possible extravagance of the Labour party, it has never taken that form. I have never supposed that they would pour out large sums of money recklessly in guarantees to private enterprise. I do not think that is part of their political philosophy at all. I think they will be more inclined to take an entirely different method. Whether the administration remains as at present or whether the two Front Benches change, I cannot see that there is any reason for the fears that have been expressed. What leaps to the eye

is that by passing this Amendment we should be placing, I think, unnecessary obstacles in the way of an expansion which I should be very glad to see. Therefore, as I want the Measure to operate smoothly and rapidly, I prefer the form in which the Bill stands at present.

4.18 p.m.

Mr. BENSON: I was rather astonished at the speech of the hon. Member for Huddersfield (Mr. Mabane), and also at the support he got from the hon. Baronet the Member for Farnham (Sir A. M. Samuel). I do not know whether they realise it, but they have, in effect paid a tremendous compliment to the financial stability of any future Labour Government. The hon. Member suggested that there is a possibility that Parliament's responsibility under this Bill might in the case of a later Labour Government grow to at least £100,000,000. That means that there would have to be a capital of £400,000,000.

Mr. MABANE: No, £100,000,000.

Mr. BENSON: Does the hon. Gentleman suggest that the guarantee is 100 per cent?

Mr. MABANE: Yes. Ask the hon. Gentleman in front of you.

Mr. BENSON: In Clause 4 the guarantee is definitely limited to 25 per cent. [Interruption.] I am not concerned with the hon. Member's opinion. I am arguing about the Bill.

Mr. MABANE: If the hon. Member had followed the Debate, he would realise that the hon. Member for Seaham (Mr. Shinwell) put the very question to the Chancellor of the Exchequer at an earlier stage of the proceedings, and the Chancellor definitely assured the hon. Gentleman that he was wrong in placing the interpretation he put upon it that the the hon. Member is now putting upon it.

Mr. BENSON: I am under the impression that my hon. Friend raised the question of the maximum liability of the Government. Speaking from memory, the Money Resolution gives a figure of £1,000,000, which allows a maximum capital of £4,000,000. It is clear that the limit of the liability of the Government is 25 per cent, of the amount of the loan. However, we will leave that point to be dealt with by the Chancellor. The hon.


Member suggested that we shall be able to raise £100,000,000 from private subscribers at a very cut rate of interest with only 25 per cent. guaranteed. I doubt whether any Government could raise money on the terms offered in this Bill to the extent of £100,000,000. We have far less confidence in the financial stability of the Government, because we are convinced that they will have very grave difficulties, on the terms they have offered, in raising any adequate sum of money. Our main objection to the Bill is that the Government are relying on private generosity. They are not going to solve the problem of the distressed areas by raising money on the basis of private generosity. They are going back 30 or 40 years in their methods. If they want to deal with the distressed areas, let them tackle the business on a sound basis and not drag in private generosity, which is bound to fail in any scheme of adequate size.

4.22 p.m.

Mr. PETHERICK: I think the hon. Member for Huddersfield (Mr. Mabane) was justified in the misgivings that he expressed. Hon. Members opposite on the Second Reading complained that it was a very small Bill which did not go nearly far enough, and urged that the guarantee should be larger. To-day they say they hope they will be able to stretch it a bit further than it appears to go, but they do not think they can. The only Member who has come out hot and strong and thinks he can stretch it further is the hon. Member for West Middlesbrough (Mr. K. Griffith). He said that, while the Treasury is in its present hands, there is no fear of improper uses and, if hon. Members above the Gangway are returned, he thinks they will go on a different basis. Therefore, the only danger that appears likely to come is from the bench below the Gangway.
It seems to me that there is a case to be answered here on the part of the Government. As I understand it, the liability under the Bill as it stands would be £1,000,000, to which of course are to be added various other items for reserves, winding-up expenses and so on. It is already a pretty large sum, but by the agreement between the Treasury and the company the amount guaranteed may grow to a large extent. I will not follow hon. Members opposite in the astro-

nomical suggestions of £100,000,000 which they have put forward, but it seems to me that there is a little doubt, reading the Bill in conjunction with what the right hon. Gentleman said on the Second Reading, that the amount to be guaranteed can be stretched to a very considerable figure if the Treasury takes advantage of the powers that are being granted to it. I do not believe anyone on this side of the House would like to grant money to the Government, even in the form of a guarantee, without the very strict control of Parliament. Sometimes we sit up all night haggling about a few pounds being granted for Supply, and Members get extremely agitated on this question. It seems to me equally important that the House of Commons should be exercised in its mind when it is a question of granting money, not right out, but in the form of a guarantee which the Government may be called upon to fulfil. I hope that the Chancellor will make it clear that our fears are groundless or, alternatively, that he will take such steps as to make those fears impossible of realisation.

4.26 p.m.

Mr. CHAMBERLAIN: I am sorry that the Bill, which admittedly contains some technical provisions, should have caused so much doubt and anxiety, but if hon. Members find it obscure in its terms, I do not think there can be any obscurity about the purpose of the Bill. I think the Committee realises what is the object of bringing forward this proposal, namely, to try to get started in the Special Areas small industries which it is alleged could be started to-day if only they could obtain finance, but which cannot obtain finance because the risks incident to their starting are greater than the ordinary financial sources are willing to undertake. That being so, I listened with some surprise to the suggestion of the hon. Member for Huddersfield (Mr. Mabane) that there is a serious danger of some extension of an indefinite amount in the operations of the company which we are proposing to set up. I have been criticised several times by hon. Members opposite for taking too moderate or pessimistic a view of the operations of the company, but, I am bound to say I think anyone who has any idea of it raising £50,000,000, and finding opportunities of utilising it, is living in a world of illusion.
The operations of the company, as I conceive them, are not likely ever to be on a gigantic scale. The thing is an experiment for small businesses and I am not expecting that the Bill, even if it is as successful as the most sanguine anticipate it will be, is going to set the Thames on fire or provide any great revolution in the affairs of the depressed areas. We have been told by the Special Commissioners that the problem of the Special Areas cannot be solved by any single remedy. You have to employ a great number of different remedies, all perhaps individually of comparatively small extent, but the cumulative effect of which will, it is hoped, make an impression on the problem as time goes on. This is one of those steps.
The hon. Member is alarmed because it is provided in the Bill that the capital of the company may be further increased, provided it has the consent of the Treasury, without coming back to the House of Commons. Of course, the reason why the Bill is drafted in this form is that, if the operations of the company proved that there was a real demand for finance which could be met by a company with these powers, it was not desirable to be hampering or delaying its operations by having to come to Parliament for fresh legislation, but that the Treasury might be relied upon, with the safeguards in the Bill, and. with the well-known characteristics of the Treasury, to see that no dangerous or revolutionary experiments were tried.
Let the Committee understand what the effect of this Amendment would be if it were carried. It would not be possible to increase the capital of the company without further legislation. My hon. Friend says that he has confidence in my hon. and learned Friend the Financial Secretary and myself; but he fears what might happen if another Government had control of the Treasury. It appears to me that I should be under a security which I should have thought would be foreign to his nature. What is the proposal? How is this capital to be raised, if it is to be increased? Is it to be a grant by Parliament for really the arguments which have been adduced have almost been upon that basis. But that is not so. The new capital will have to be raised from the public. The hon. Mem-

ber for Chesterfield (Mr. Benson) has criticised my statement about the terms upon which the original capital is to be raised, and says that it will be so unattractive that he does not believe that we shall get the money at all. Does the hon. Member for Huddersfield think that because the Treasury are to guarantee losses, the public will rush in in order to take over their share of the losses? Is not my hon. Friend's fear of any dangerous increase in the liability of the Treasury really met by the fact that, before the guarantee of the Treasury comes into operation at all, you have to persuade the public that it is worth their while to run the risk of loss as well?

Mr. MABANE: Will the right hon. Gentleman clear up the point which was raised by the hon. Member for Chesterfield (Mr. Benson) and myself, and which is disturbing many of us, namely, whether the Treasury guarantee is for £1,000,000 in the case of the £1,000,000 company, or £250,000. The Chancellor of the Exchequer said that as the company continued to function the losses would accumulate, but that they could not exceed the total amount of the capital. Does the limitation of the amount of loss exceed that sustained on the whole process? The hon. Member for Seaham (Mr. Shinwell) said very definitely that the liability was one of £1,000,000, and not £250,000. I ask for information on the point, because many of us are rather disturbed about the matter.

Mr. CHAMBERLAIN: I was about to give some information on the subject, as there seems to be some differences of opinion and doubts, which I wish, before I say anything about that, to point out to the hon. Member, that it is really not relevant to the argument I was just then putting. Whether the Treasury's ultimate liability amounts to the total amount of the capital or to four times the capital, the fact still remains that losses may have to be found not only by the Treasury, but also by the public. The public are not going to supply the money if they think that they are going to lose it. I agree that, if the public thought that the party opposite were likely to be in power, it would still further increase the risk.

Mr. GARRO-J0NES: My anxiety on this Bill would have been considerably lessened from one point of view if it


really had been the public who were to put up the money, but we know that the Chancellor of the Exchequer has had conversations with certain banking circles, probably with the Governor of the Bank of England, and that the money would not be scrutinised by the public but by the banking interests, and the same considerations would not apply.

Mr. CHAMBERLAIN: The hon. Member evidently knows a lot more than I do. I was not aware of that, and, in my opinion, the bulk of the money will be put up by the public.
To return once more to the point as to what the ultimate liability of the Treasury can be, of course, the liability of the Treasury cannot be more than the capital of the company for the time being. If the capital of the company is £1,000,000, then the Treasury cannot lose more than £1,000,000. I am speaking of the effects of the guarantee, and not of the £20,000 a year for administrative expenses or the £100,000 contribution to reserve. But, according to the guarantee of the losses of a concern, the liability cannot be more than the original amount of the capital. The hon. Member opposite does not quite appreciate that the capital can be lent over again as it is repaid. That which has been lost cannot be loaned over again, and the total amount cannot be more than the total amount of the original capital. Therefore, if the capital is increased, the amount that can be loaned is increased, and the amount of liability will be increased pari passu. The possible liability of the Treasury in that case would be the amount of the increased capital.

Mr. SHINWELL: This is the point which troubles the hon. Gentleman the Member for Huddersfield (Mr. Mabane) and myself. If the total capital to be raised by the company, irrespective of any question of re-lending, is £1,000,000, and the guarantee provided by the Government is 25 per cent. of the total capital to be raised, surely, the liability' of the Government is then £250,000. Is that not so? Why does the right hon. Gentleman say that if the total capital to be raised is £1,000,000, the liability of the Treasury is £1,000,000?

Mr. CHAMBERLAIN: It is a recurring credit. It recurs a second time.

Mr. SHINWELL: If the business undertakings who borrow money from the company and set up their various establishments repay the loans, then the company can use those repayments for the purpose of assisting other business undertakings to establish other industries. That is true? Even if that is so, the total capital at any given moment, in spite of the repayments, can only be £1,000,000. Surely that is so?

Mr. CHAMBERLAIN: The nominal capital can only be £1,000,000. It is a revolving credit over and over again. Losses may be made the second time it is loaned or the third time it is loaned.

Mr. SHINWELL: But if the amount of capital, even in spite of the re-loaning and repaying processes, remains £1,000,000, the guarantee of the Government, which is 25 per cent. must be a fixed figure of £250,000. I cannot understand it.

Mr. CHAMBERLAIN: I am sorry, but perhaps the hon. Member will have another go. If I draw his attention to the last words of paragraph 4 in the Schedule he will see that it reads:
in respect of the company's first loans and the sum so payable in respect of the company's additional loans shall neither of them exceed one quarter of the amount of the loans.
If you loan £1,000,000 four times, you have loaned altogether £4,000,000, and a quarter of £4,000,000 is £1,000,000. Does that make it clear?

Mr. SHINWELL: If you loan £1,000,000 four times, you clearly would have loaned £4,000,000, but if the capital of the company is, as the Chancellor of the Exchequer says, £1,000,000, how do you loan £1,000,000, which is the capital of the company, four times?

Mr. BENSON: The Chancellor of the Exchequer can loan £1,000,000 four times, but paragraph 4 of the Schedule provides the first £1,000,000 loan and the second, and there is a 25 per cent. guarantee in respect of the loss on each. If you have your £1,000,000 paid back, there are no losses on that sum, but you cannot re-loan the £1,000,000 until the first loans have been paid back. Surely that automatically wipes out any guarantee in respect of that particular £1,000,000, and the guarantee on the second loan is a second guarantee.

Mr. CHAMBERLAIN: The hon. Member for Chesterfield takes a technical interest in these questions, but the first £1,000,000 is expressly provided as a transaction in itself. But there is not the same distinction made between the second, third, fourth or any other subsequent £1,000,000.

Mr. EDE: Surely the £1,000,000 used is borrowed from the public and the guarantee is to the public. What happens to the £1,000,000, or how it revolves is no concern of the public until they want to get back their share of it which they have loaned. That is how I understand it. If at the end of all these transactions the whole of the £1,000,000 has been lost, are we to understand that the £1,000,000 is guaranteed to the public or even at the end of the transactions, when it has revolved a great many times and the loans may have totalled more than £4,000,000, will the public be entitled to more than £250,000, the 25 per cent. on the first £1,000,000?

Mr. ALBERY: May I make an effort to see whether I can understand this conundrum. Suppose that £250,000 were lost as the result of the first £1,000,000 which had been loaned. There would then remain £750,000 to be re-loaned. Suppose that sum of £750,000 were loaned and that 25 per cent. of it was lost. I think that the hon. Member for Seaham (Mr. Shinwell) will see that we should have already lost over £250,000, although never more than £1,000,000 had been loaned.

Mr. CHAMBERLAIN: Perhaps I may be allowed to finish my observations after this conversation. I am obliged to my hon. Friend, and perhaps it is clear from the examples which he has given how this is going to work. The only other observation I want to make is that it has been commented upon that there is no mention in the Bill of the 10 years' life of the company, which I mentioned when moving the Second Reading. Some hon. Members thought that either I ought not to mention it, or if I did mention it, it ought to be in the Bill. It was not put into the Bill, but I thought that it was advisable to mention it because it was necessary in the Memorandum of Association that there should be a provision limiting the life of the company, and that the company should be wound up not later than a certain date. Although, as

I explained, there would be a limit to the life of the company, if the company were very successful it would be possible to come again, not to the Treasury this time, but to this House to obtain further legislation to prolong the life of the company. It is put in t there in order that there should be some guarantee to shareholders and that the Treasury should not be under liability.

Mr. MABANE: It is difficult for many of us to understand this matter, but I wish to put a point which is troubling so many of us, and which may quite alter our attitude to the Amendment. Is it possible for those who subscribe the capital to this company to lose 75 per cent. of their money, or are they quite certain that they will not lose any of it? That, in a nutshell, is the position which is troubling us.

Mr. CHAMBERLAIN: It is possible for them to lose 75 per cent.

4.44 p.m.

Mr. EDE: I am really amazed at the inartistic approach of the Treasury to this matter. This seems to me to be the position. If the Treasury want to guarantee a further loan they may do so whether this House wants them to do it or not. It would then be administered by the Treasury, and the only way to deal with it would be to move to reduce the salary of the Chancellor of the Exchequer of that day. If, on the other hand, the Treasury do not want to give a fresh guarantee, but Parliament wants to do it, then, under the point raised by the hon. Member for Huddersfield (Mr. Mabane), if the Treasury say, "We are not going to do it," the only way to deal with the matter would be to promote a fresh Bill and go through all the various stages that we are going through with this Bill. It is really giving statutory recognition to the position which the Treasury occupied when Lord Snowden was Chancellor of the Exchequer, and which some of us had to put up with in supporting him when we sat on the benches opposite. I imagine that we had quite enough of it in those days, and I for one do not welcome this way of re-stating it.
I am not convinced by the answer which the right hon. Gentleman has given to the hon. Member for Huddersfield. May I put to him again the question that


I addressed to him before? I understand that this money is to be raised from the general public. The right hon. Gentleman assured us that he believed that it could be raised from the public, and he has repeated that assurance this afternoon. Say the public are willing to lend the company up to £1,000,000. Then the company, I suppose, will go away and trade with it, like the servants in the parable. When the public return to demand their talents back, they will find that their talents have been wrapped in a Parliamentary napkin and that they will be handed back to them whole—or will they only be guaranteed one in four of them?
We appear to have had from the Chancellor of the Exchequer, who is usually so devastatingly clear, two contradictory answers. Sometimes he appears to say that they will get the whole £1,000,000 back, and at other times he says that they will lose £750,000. The example given by the hon. Member for Gravesend (Mr. Albery) did not really help us very much, because it is no great concern of the public how many times their £1,000,000 is loaned out by the company. They will have lent their £1,000,000, and what they will be interested in, and what we are interested to know, is whether the lenders of the original £1,000,000 are to be guaranteed £250,000 or are they to be guaranteed the full £1,000,000? On the money they lend they are to get interest and they are to have a guarantee of repayment. Are they guaranteed full repayment, or are they only guaranteed -one-fourth? If they are guaranteed the whole, where does their prospective loss of £750,000 come in?

4.48 p.m.

Mr. BENSON: Is it possible that under this Bill the lenders will lose nothing and get the whole of their capital back, while the Treasury will have to find a guarantee of 1,000,000? I think that is the point that has been raised. The question is whether the lenders will get their whole £1,000,000 back and the Treasury in certain circumstances will find themselves having to provide £1,000,000.

4.49 p.m.

Mr. SILVERMAN: The House seems to have been left rather more confused than it was before. It may be that the Chancellor of the Exchequer could say, in the words of Dr. Johnson, that he can

give his interlocutor arguments but not the intelligence to understand them. Whether it be lack of intelligence on the part of the Committee or lack of lucidity in the Chancellor of the Exchequer's explanation, or in the proposals, it is a fact that we are more confused than when we began. Some of us are beginning to wonder in what circumstances the Government can lose any money at all, except in proportion as the whole scheme completely fails. Apparently, what is to happen is that the company is to raise £1,000,000 of capital from the public, and it will use that money in order to finance in the special areas small industries, which, ex hypothesi, have not been able to get advances in the ordinary way because of the additional risk involved. If it should turn out that those small businesses succeed and there is no loss, in those circumstances the Government will not be called upon for its guarantee, and its expenditure is limited to the administration expenses from year to year and the winding-up expenses in due course. But suppose those small businesses should fail, then the Government will provide 25 per cent. of the money that is lost.
Therefore, what the Government are really saying, in the final analysis, is that some attempt ought to be made to finance small businesses in areas which, ex hypothesi, are not likely to succeed in getting the money on their own resources, and provided the general public will contribute 75 per cent. of any losses that may be made the Treasury will contribute 25 per cent. If that is really the proposal that the Government are making, then, although I have no right to speak for my colleagues, and I speak only for myself, it seems that we shall have to consider even the amount of support that we have given to the Measure so far.

4.52 p.m.

Mr. LEWIS: I listened with care to the explanation given by the Chancellor of the Exchequer as to the maximum liability of the Treasury and, with the greatest diffidence, I feel bound to say that it appears to me that the right hon. Gentleman does not really understand the working of the Bill. Take the £1,000,000 lent in the first instance. Suppose nothing is lost and the £1,000,000 which is loaned out comes back. That process can be repeated indefinitely and there will be no loss to the Treasury. Take the other


eventuality. You lend the £1,000,000, and you lose, say, £100,000. The loss to the Treasury in that instance will be £25,000. The company will now have £900,000 left, and they lend that again. Suppose they lose another £100,000. Again, the Treasury will lose £25,000, and so on until ultimately the whole sum is lost. Ten times £25,000 is £250,000. I cannot see how any other possible explanation can be given of the effect of the arrangement as stated in the Bill. In paragraph 4 of the Schedule, there is a limit of the liability of the Treasury to a total amount of £250,000; it may be less, but it cannot be more. It does not matter whether the capital is lent once or 20 times over.

4.54 p.m.

Mr. MAINWARING: The hon. Member opposite has been trying to elucidate the matter, but it seems to me that each hon. Member who contributes to the Debate contributes something to the confusion. I am not certain whether I shall avoid doing that myself. As I understand paragraph 4, it lays a responsibility upon the Treasury to meet losses of capital which exceed the amount of reserves, with a limit as to the responsibilities of the Treasury not exceeding one-fourth of the amount of the loan. One-fourth, therefore, is the maximum to which the Treasury is committed. If on the first turnover of the £1,000,000 one-fourth of the capital is lost, there will be no reserves available to meet that. The company will have received nothing, and they will have lost one-fourth of the capital. Who is to meet that loss? Presumably, the Treasury. If the Treasury make good the loss, then the £1,000,000 is once more intact and ready for its second turnover for lending purposes. How long could this procedure go on? The Chancellor of the Exchequer suggested that the final obligation of the Treasury is £1,000,000. Therefore, I presume it could only turn over four times, but it seems to me that it could go on so long as the wheel was there.

4.56 p.m.

Mr. GARRO-JONES: My hon. Friend has brought forward a very relevant point. The question at issue is the Treasury safeguard as regards capital raised and the Treasury liability as to the amount of money lent or lost. It,

therefore, becomes necessary to ascertain how much money this company can actually lend, and I should like to know from the Chancellor of the Exchequer whether the company is to have powers to borrow. If they are to have powers to borrow, then they can lend the amount of their capital not once nor twice but seven or eight times, and in proportion to the amount of capital lost by these loans, perhaps, £10,000,000, the Treasury would be liable to repay 25 per cent. of those losses. Much of the confusion which is arising is not due to the stupidity or obtuseness of hon. Members, but to the fact that the Bill is drafted in an extremely vague way and that we have not before us the memorandum or articles of association of the company which is to operate the Bill. It would have been a splendid thing if we could have had the memorandum and articles of association laid before us. Unless we know whether the company is to be able to borrow or not we do not know how much they will be able to turn over their capital in the way of losses.
The Chancellor of the Exchequer in reply to me said that it was not the banks who would put up the money, but the public. There, again, there was some confusion of thought in the right hon. Gentleman's reply, because everybody knows that what will happen will be that the banks will underwrite the capital and the public will then be asked to subscribe it. The underwriters' responsibility is only to satisfy themselves that the, money is going to be subscribed. Once the money is subscribed the underwriters are discharged from all their liabilities and in many cases also from their interests in the company. It will be then for the people who have subscribed the money to supervise the operations of the company. The scrutiny of the underwriters in guaranteeing the subscription of the money will be no safeguard against malpractices in the administration of the company. We have no safeguards whatever on that score.
That brings me back to the remarks that I previously made, which were intended to register the fact that the Chancellor of the Exchequer has given us no information as to how this company wilt operate. We do not know what type of applicant there will be, nor how much public money the company can loan, and


we do not know to what liability the Treasury is committed. We ought to have some fuller explanation before we proceed to any further discussion.

5.0 p.m.

Mr. CHAMBERLAIN: There seems to be only one thing on which everybody is agreed, and that is that the Chancellor of the Exchequer does not understand the Bill and could not explain it if he did. It is rather discouraging. One difficulty, I think, which has arisen is that hon. Members do not altogether realise that the 25 per cent. which is the limit on the liability of the Treasury is not 25 per cent. on losses but 25 per cent. on loans. It is not quite the same thing and it makes a difference in understanding what are the prospects. The hon. Member for South Shields (Mr. Ede) said, I think, that I had given contradictory replies. The replies I gave were different, it is true, but they were in reply to different questions. The answer to any question as to what is the ultimate liability of the Treasury depends upon the assumption made in the question. If you alter the premises you must also alter the answers, and it does not mean that the answers are contradictory.
My hon. Friend the Member for Colchester (Mr. Lewis), who seemed to have some doubt as to my understanding of the Bill, said it was quite clear to him that the Treasury could not possibly lose more than £250,000, because if they lost £25,000 a year for ten years that would make £250,000. That is quite true on the assumption that they are going to lose £25,000 a year. If they did lose £25,000, and lost the same amount ten times, it is quite true by mathematical calculations that you arrive at a loss of £250,000. But how does he know they would only lose £25,000 in one year? Suppose they lost £100,000. If you make these assumptions you can work out all kinds of different results. The ultimate respective liabilities or losses of the Treasury and the shareholders will depend upon the number of times that the capital is lent and the losses upon that capital. The hon. Member for Chesterfield (Mr. Benson) put a question which I think I can answer so that anybody can understand. He asked whether it would be possible that the Treasury in the end might have lost the whole £1,000,000 and

the shareholders might have got the whole £1,000,000. My answer is that that is possible. It is conceivable.
Suppose, for example, the first £1,000,000 is lent and no loss is made upon it. That is a single transaction and not a transaction to be aggregated with any other. That £1,000,000 may be lent again twice or thrice or four times. Let us suppose that the £1,000,000 had all been repaid without loss. It is lent again a second time and again repaid without loss. It is lent a third time and again repaid without loss. Then it is lent a fourth time and the whole of it is lost. The total amount of the loans, not the losses, leaving out the first transaction, will be £4,000,000, and 25 per cent. of the loans is £1,000,000. That constitutes the amount which the Treasury can lose. In that case the Treasury would have lost the whole £1,000,000 and the shareholders would have their £1,000,000 still in hand. I do not think that is very likely to take place. That is not how it is going to work out in practice. Hon. Members will see that there may be every kind of variation between that and other kinds of losses. All I can say is that this is the maximum amount the Treasury can lose—£1,000,000£unless the capital is increased. Short of that the losses may be divided between the Treasury and the shareholders in almost any conceivable number of proportions.

5.8 p.m.

Mr. PETHERICK: I am sorry to trouble the House again but a very ingenious red herring is drawn by the hon. Member for Seaham (Mr. Shinwell). The point is not whether more than £1,000,000 can be lent or whether the Treasury is going to lose 25 per cent. The point of the Amendment is this: Suppose the Treasury wish to increase the capital still further; then we think the Treasury should come to the House of Commons and ask for further guarantees. I do not wish to labour the point but it is a question of principle. We should not allow the Treasury to grant further guarantees without knowing how far they will go. The guarantees might be subject to political control in the future by a Chancellor of the Exchequer who might have large ideas and try to stretch the provisions of the Bill to the maximum possible. May I ask the Chancellor of the Exchequer one question? We know


that guarantees can be granted by the Treasury on behalf of the company in respect of loans to Dominions and Colonies and in respect of local loans and loans of that nature. Is there in fact any precedent for giving the Treasury full power to grant guarantees to a private company or a public utility company which is to lend out the money again to various small people? Is there a precedent for anything of that nature?

Mr. CHAMBERLAIN: As far as I know there is no precedent for it; it is a new thing altogether.

5.9 p.m.

Mr. SHINWELL: In view of the very lucid explanation furnished by the right hon. Gentleman it appears to me that it might be desirable for the hon. Member for Huddersfield (Mr. Mabane) to withdraw the Amendment. Before it is withdrawn, however, as the hon. Gentleman who has just spoken has attributed to me a responsibility for raising a red herring, may I say that if he refers to the Debate on the Financial Resolution he will find that I postulated the precise point that has now been cleared up by the right hon. Gentleman I pointed out that it was likely, if the Treasury provided a guarantee of 25 per cent., that the total amount of capital raised throughout the operations of this proposed company would be £4,000,000. If the right hon. Gentleman on that statement had given a clear and unequivocal reply we might have been saved all this confusion.

Mr. LEWIS: I would like to apologise to the Chancellor of the Exchequer for having cast doubt on his apprehension of the Clause. He has shown the Committee quite clearly that, as we thought, the maximum liability might in fact go up to £1,000,000. What I do not understand is why it stops at £1,000,000. He said the money could be lent four times over. If it was lent eight times over the liability would be £1,750,000.

Amendment negatived.

5.10 p.m.

Mr. MABANE: I beg to move, in page 2, line 18, at the end, to insert:
but in any case no consent to an increase of capital shall be given or any modifications of an agreement made that would have

the effect of increasing the total liability of the Treasury beyond the sum of two million pounds.
I want to ask the Chancellor of the Exchequer to give Parliament a right to determine whether or not there shall be an increase in the capital of the company. May I ask whether he regards any more favourably than before the suggestion to limit the increase in capital, so that in no case shall the total liability of the Treasury go beyond the sum of £22,000,000? If he is not prepared to accept the sum of £2,000,000 would he be prepared to accept any limit whatsoever? Capital might be increased carrying with it a potential liability for the Treasury, and I think we should be careful, before parting with the Bill, to see that it does not give the possibility of the liability of the Treasury being increased to an unlimited amount.

5.11 p.m.

Mr. PETHERICK: I hope the Chancellor of the Exchequer will consider whether he can accept this Amendment. It would go far to remove some of our misgivings. Indeed I think the insertion of a specific amount in the Bill would remove our remaining fears altogether. What we are afraid of is that at some future date a Chancellor of the Exchequer may decide on a certain line of policy and may decide to extend the amount of this guarantee. If the amount of £2,000,000 is specified we shall know that the Bill when it becomes an Act will be carried out as Parliament at present intends it to be carried out and that it could not be stretched.

Mr. ALBERY: The Chancellor of the Exchequer has just stated that there is no precedent for the manner in which this Bill is drawn and we have always understood that the whole thing is an experiment. It seems to me that it is only reasonable that Parliament itself should have the right to decide, after a certain amount of experience, whether the experiment has been successful or not.

Mr. K. GRIFFITH: I hope the Amendment will not be accepted. I really think there is no reason for hon. Members' fears. After all if, as this experiment goes on, it is found that the money gets lost and that there is no success, it would try up by itself. The public would not find the money. If it is a success and the


money can be placed out to good advantage, why should we restrict it? If it is going to be a success—and I should very much like to see that—then the more we can encourage these industries the better. If there is any loss it will correct itself. There is no reason for trying to put constraint on the scheme before it has even had a chance to start.

5.13 p.m.

Mr. SHINWELL: It seems to me that no limit should be placed on possible expansion. As has been said, expansion depends almost wholly on the success of the undertaking. If success is achieved no hon. Member in this House would seek to place any limitation on the company's operation. My own view, for what it is worth, is that it is extremely unlikely that the liability which will fall upon the Treasury will reach anything like the amount suggested in the Amendment. In view of that I think the Amendment should be accepted.

5.14 p.m.

Sir A. M. SAMUEL: I do not know whether some of this money is going into buildings or if money is to be issued in financing month to month production, and purchases and sales. If a large proportion of the £1,000,000 goes into buildings or into machinery or stock you would come to the limit of the amount and you would require expansion. I do not take exception to the Bill in any shape or form, but when hon. Members talk about limit and expansion we come to question what the limit is and what that expansion is for. In the Preamble to the Bill it says:
To obtain financial facilities from banks or financial institutions.
Those who have to deal with commercial questions know the difference between providing fixed capital and short-credit; that is to say whether capital or the credit is required as fixed capital or for current trading facilities. A new business starting in a depressed area may say that it wants money for buildings and machinery, or that it only wants money to keep production and sales financially liquid, so that it is able to find money to produce and while its goods are being turned again into money by the retailer; or it may need both types of help. We ought to know what the Chancellor of the Exchequer has in mind; whether

the money is to go into buildings and machinery or is to be used to provide financial facilities for these businesses; whether it is going to be used as fixed capital or for revolving credits of a few months. Then we should know how to interpret the expressions used by the hon. Member for Seaham (Mr. Shinwell).

Sir G. ELLIS: In any case payment to the Treasury must be on the winding-up of a company. The fund may last for 10 years, that is the extreme limit, and unless the company has used its resources we may be without any information as to what liabilities the Government have incurred up to that time. We may not be able to find out the liabilities of the Government until we come to the winding-up of the company.

5.18 p.m.

Mr. BENSON: I hope the Chancellor of the Exchequer will elucidate the reference to the 10 years. The liability of the Treasury seems to depend on the number of times the capital is lent and repaid.

Mr. CHAMBERLAIN: And the amount of the losses.

Mr. BENSON: Yes. The limit is set by the number of times the capital is repaid. If the company is to be wound up in 10 years it means that the money will only be lent once or that it will be lent over short periods. If we desire to start new businesses in distressed areas the idea that the capital must be repaid rapidly over a short period is going to militate very strongly against firms asking for help. The knowledge that they will have to repay the capital rapidly will prevent businesss being started where, if capital was found over a considerable period, they might be started. I hope the Chancellor will not accept the limit of £2,000,000. It would mean that there could be no increase of capital by the company of more than another £1,000,000 over and above the first £1,000,000, and if the Bill it to be a success—of that I am sceptical—it will be a grave mistake to limit its operations to £2,000,000.

5.21 p.m.

Mr. LEWIS: The hon. Member for Huddersfield (Mr. Mabane) is not wedded to the figure of £2,000,000. Like many of us, he thinks that there is something to be said for a limit. This House in the past has objected to giving an


unlimited authority to the Government to spend money on any particular object, and as a matter of principle, a limit should be put in the Bill. I hope the Chancellor of the Exchequer will reconsider this matter and at a later stage put some limit in the Bill. If the right hon. Gentleman visualises circumstances in which £2,000,000 can be used he can put his limit as high as £5,000,000, but I think he should put some limit in, as Parliament does not like to give a blank cheque to the Government for any particular purpose. The suggestion has been made that if the experiment is a failure and money is lost it will automatically prevent other money coming forward. That does not quite cover all the possibilities. The thing may at first run on a small scale and money may go out and come back, but if it were suddenly to expand on a large scale the money might be lost. Many small companies have been carried on successfully for years, and then when they have been greatly extended great losses have been incurred. Such circumstances might arise in this occasion, and I hope the Chancellor of the Exchequer will put in some limit in order to satisfy the principle.

5.23 p.m.

Mr. CHAMBERLAIN: There is a practical difficulty which makes it impossible for me to accept the Amendment, but even if it did not exist I should not feel disposed to recommend the Committee to accept the Amendment. It is not necessary, for the reasons I have already given to the Committee at some length. In the speech of the hon. Member for Colchester (Mr. Lewis) I detected a feeling that the Committee is being asked to guarantee that the Treasury will find money for an indefinite amount in the future without having the specific authority of the House for so doing. This is not a parallel case to one in which commitments are being undertaken on behalf of the Government. When you place contracts for armaments over a period of years you have a guarantee behind you. Here the public have to supply the money, the public will run considerable risks for practically no reward, and you may be quite certain that they are not going to run these risks indefinitely unless the prospects of the work to be done by this

company become much more rosy than I reckon them to be at this stage. I think it would be objectionable to put in a high limit because it would encourage people to think that £5,000,000 is all that we are aiming at.
I do not want to prophesy about the future. Let us try the experiment on the limited scale we are suggesting to the Committee and see sow it works. It will then be time enough to extend it. The hon. Member for Ecclesall (Sir G. Ellis) said that there will be no opportunity for the House for 10 years to find out what is going on. He has forgotten the point, and the hon. Member for Huddersfield (Mr. Mabane) has forgotten it, that the liability of the Treasury is not confined to the 25 per cent. losses on loans. There are other contributions by the Treasury. There is a contribution to reserve and also an annual contribution to the expenses, and as this annual contribution will have to be voted there will be an opportunity every year for the House to revise what is being done and ascertain the position of affairs. What this annual contribution will ultimately be we cannot say. It is impossible to say that the capital of the company shall be such as will limit the liability of the Treasury to a given amount. The £20,000 annually has to be taken into account and the ultimate obligation of the Treasury is impossible to foresee.

Mr. MABANE: I thank the Chancellor of the Exchequer for his explanation and I quite recognise that I had forgotten the £20,000 to be paid yearly, which might come to a very substantial sum over a number of years. If we can alter the Amendment to avoid that difficulty and provide that the increase of liability should refer only to an increase of capital, would it be more acceptable to the Chancellor of the Exchequer?

Mr. CHAMBERLAIN: I thought I had made it clear that although there was a difficulty in this matter that even if the difficulty did not exist I should not be able to accept the Amendment for the other reasons I have given.

Amendment negatived.

5.27 p.m.

Mr. MABANE: I beg to move, in page 2, line 21, at the end, to insert:


and such agreement or agreements shall have effect if no resolution to the contrary is passed by Parliament within a period of twenty-eight days.
I continue my endeavours to secure for Parliament a little more control over the operations and procedure of this company. Sub-section (3) of the Clause reads:
The Treasury shall, as soon as may be, lay before Parliament a copy of the said agreement and of any further agreement by which it is modified.
If this House does not approve of the agreement or any particular term in the agreement, it would have to proceed by way of Prayer, and that is a difficult procedure for which time has to be found. I am suggesting in the Amendment to add the words:
that any such agreement shall have effect if no resolution to the contrary is passed by Parliament within a period of 28 days.
That is a negative way of giving effect to the agreement. There will be some matters in the agreement, when it is finally made, that Parliament should be able to discuss. It is a very modest proposal, and I hope that the Chancellor of the Exchequer, having resisted my previous efforts to secure a greater degree of control to this House, will make this small concession, so that Parliament may have an opportunity of discussing the terms of the agreement entered into between the Treasury and the proposed company. As the hon. Member for Ecclesall (Sir G. Ellis) has said, it is important that the House should know the annual position as between the company and the Treasury. Many hon. Members, I am sure, will like to make it a condition of the agreement that the company should reveal at the end of each year the liability of the Treasury at the moment of the compilation of the account. Would it not be a good thing if Parliament had the chance to suggest, or indeed, to exercise pressure to see that a condition such as that is included in the agreement? I hope that the Chancellor will be a little more yielding on this Amendment.

5.30 p.m.

Mr. SHINWELL: We on these benches have expressed criticism of this Bill, although at the same time we have intimated our decision to accept it; but if it is to be passed by this House eventually, we desire that no restrictions

be placed in the way of the company's operations. The company must be given a fair chance to show what it can do. Therefore, in our submission, if Parliament is from time to time to have the opportunity of raising issues relating to the operations of the company, it may have the effect of restricting the company's activities and may also have an injurious effect so far as the raising of capital is concerned. For that reason we do not intend to support the Amendment.
On this head I would like to ask the right hon. Gentleman whether he could furnish the Committee with some information. May we take it from him that, as regards the original memorandum of association which relates to the agreement entered into between the Treasury and the company to be formed, the House will have an opportunity of voicing its opinion on the matter? From the speech of the hon. Member for Huddersfield (Mr. Mabane), I gathered that he desires that any subsequent modifications of the original agreement should, if necessary, be discussed by this House. That may be desirable, but it seems to me that the right hon. Gentleman's reply on the previous Amendment covered that point, because if there is to be an annual opportunity of discussing the operations of the company and the question of administrative expenses, that may be sufficient for the purpose which the hon. Member for Huddersfield has in mind. Every year we shall have the opportunity, I take it, of asking questions with regard to the company's liabilities and its future operations and all other matters relating thereto. I venture to ask the right hon. Gentleman whether, as regards the original agreement about to be entered into, the House will at any time have an opportunity of expressing its opinion on the matter?

5.33 p.m.

Mr. PETHERICK: The hon. Member for Seaham Harbour (Mr. Shinwell) has made a plea that the company when constituted shall be free to carry on its work without being hampered at all. I think there is a great deal to be said for that. At the same time, Parliament is voting that a guarantee shall be given in respect of the debts of the company, and it is also voting that a guarantee shall be given for unspecified debts which the


company may incur later on. Consequently, I think Parliament is also entitled to have some check on the further commitments which the Treasury may enter into on behalf of the country in this respect. On the previous Amendment the Chancellor of the Exchequer took up the general defence of the Bill on two lines. He said, on the one hand—no doubt in order to try to allay the fears of hon. Members, such as the hon. Member for Huddersfield (Mr. Mabane) and myself—that it is only a little Bill, and he said, on the other hand, that the Treasury are such Shylocks that they will not disgorge more money than they can help. If that be the case, it is simply a guarantee of the fact that the administration of the scheme will be carefully gone into. Nevertheless, I think that Parliament as well as the Treasury ought to know exactly what happens. Therefore, if further agreements are entered into with the company, I think it is only reasonable that they should come before Parliament.

5.35 p.m.

Mr. K. GRIFFITH: I opposed the other Amendments moved by the hon. Member for Huddersfield (Mr. Mabane), but I think there is a good deal to be said for the present Amendment. It is not a very big Amendment, for the reason that the agreement is one which this Committee will have had its part in shaping. It deals with the Schedule, and in the Schedule there are laid down the matters to be provided for in the original agreement, and other matters which may arise in subsequent agreements. To-day we are laying down the main structure. All the Amendment seeks to do is to ensure that the House will have an opportunity of saying whether it thinks that the actual agreement has fully carried out the intentions laid down in the Schedule. The Schedule refers to the main matters, but there is nothing to prevent there being other matters in the agreement beyond those referred to in the Schedule. Subject to what the Chancellor of the Exchequer may say, I should have thought this is an Amendment which ought to be accepted.

5.37 p.m.

The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): Like the previous Amendment, this Amend-

ment combines a technical reason, with general reasons, which renders its acceptance inadvisable. The technical difficulty is that the intention of the hon. Member is to prevent this agreement having the effect of law until it has been before Parliament for 28 days, but the Amendment does not in so many words negative the ordinary consequence of an agreement being signed between the Treasury and the company. Therefore, it would not carry out the object which the hon. Member has in view, because even if the Treasury went so far as to state that the agreement would not be valid until laid before Parliament, the ordinary operation of the law would make the agreement valid.
I gather that what the hon. Member really wants is that Parliament should be able to scrutinise the agreement and make certain that it carries out its desires to promote a measure of special assistance to the Special Areas. I would draw the attention of the hon. Member and that of the Committee to the fact that the two previous Amendments, which dealt with the important matters of the money involved, were negatived, and I would therefore ask the Committee to allow this agreement in its technical details to be negotiated by the Treasury. I would point out that the Treasury is bound by the Bill to give effect to what is in the Schedules, and in the Schedules the House lays down the main features of the original agreement. Now is the time for the House to say whether the agreement in all its important characteristics is what it desires. The Committee will observe that in the case of any modification of the agreement that may subsequently be made, under Clause 1, Sub-section (3), the Treasury are under the obligation to:
lay before Parliament a copy of the said agreement and of any further agreement by which it is modified.
It should always be borne in mind that in this particular Bill, as regards the annual sum which is is to be paid under paragraph 2 of the Schedule, namely the contribution towards administrative expenses, it is specifically provided in Clause 1, Sub-section (4) of the Bill that:
Any sums required by the Treasury for making the annual payments specified in paragraph 2 of the said Schedule shall be defrayed out of moneys provided by Parliament.


The intention and the effect of those words is to make that particular sum connected with the administrative expenses of the company matter to be discussed by Parliament in the ordinary way. The Committee must bear in mind three things: first, there is to be an annual opportunity for discussing the administration of the company under that provision; secondly, the Bill makes provision for the original agreement and any subsequent agreement, before it is modified—

Mr. MABANE: If I may interrupt, I would point out that I am disturbed by the fact that future modifications in the original agreement may be modifications outside the terms of the Schedule as it exists at present.

Mr. MORRISON: Only with regard to paragraphs 5 and 6. With regard to those paragraphs, the Treasury is not bound by the Schedule, because they are paragraphs of very limited scope dealing with only one contingency, namely, the provision of fresh capital. Their object is to enable certain priorities to be given to shareholders. That is a very minor matter and one of no importance at all. I repeat that in this Bill there is provision for an annual opportunity for discussing the administration of the company. There is also a provision to the effect that the original agreement and agreements modifying it shall be laid before Parliament. There is no withholding of any information on the point to which this Amendment is directed. That being the case, and the Committee having negatived previous Amendments on more important matters of money, I think the Treasury should be left to regulate the details of the scheme, which are bound to be in accordance with the Schedule which is actually in the Bill.

Mr. PETHERICK: The hon. and learned Gentleman said that every year there will be an opportunity for discussing this grant. Supposing, however, the company in any given year, before the Estimates come to be discussed, enters into an arrangement with the Treasury increasing the guarantee which the taxpayer may eventually be called upon to make good, it seems to me that we in this House would only have the opportunity of debating the arrangement, but would not be able to stop it in any way.

Mr. MORRISON: I understand that the substance of the two Amendments which have just been negatived concerned the liability of the Treasury; but I would put it to the hon. Member that, in view of the fact that he and all other hon. Members will be given full information on any agreement made by the Treasury or any modification of that agreement, it will not be difficult for him to find an opportunity of calling into question anything of which he disapproves. I would further point out that the Amendment of the hon. Member for Huddersfield (Mr. Mabane) would not prevent such an agreement having effect. Therefore, I ask the Committee not to accept the Amendment.

Mr. SHINWELL: In regard to Subsection (3), relating to laying before Parliament copies of agreements, I presume that that means copies of the original agreements. I take it that an opportunity is open to the House at any time if it cares to raise these matters and question these agreements.

Mr. MORRISON: As to that, I should not like the hon. Member to be under any misapprehension. My reading of the matter is that it is merely an informative proposal; it merely gives the House the opportunity of seeing what is in the agreement. As to the opportunity which might be taken for questioning the agreement, while there are the ordinary opportunities which are open to any Member of this House to ask questions, to raise the matter on the Adjournment, and so on, I frankly tell the hon. Member that I think the effect of Sub-section (3) of this Clause is merely to lay a document before Parliament and for hon Members to take such action as may be open to them under the ordinary procedure of the House.

Amendment negatived.

Clause ordered to stand part of the Bill.

CLAUSE 2.—(Exclusion of 63 and 64 Vict. c. 51 and 17 and 18 Geo. 5 c. 21.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

Mr. MABANE: Why is this Clause necessary, in view of Section 6 (c) of the Moneylenders Act, 1900? I have no doubt there is some good reason, but I should like a short explanation as to why the Clause is put in the Bill.

5.47 p.m.

Mr. W. S. MORRISON: This is a very simple matter. Under the Moneylenders Acts of 1900 and 1927 the business of a moneylender was placed under certain statutory restrictions. There are restrictions on a great number of matters. For example, a moneylender may not advertise, except in a, certain way, his willingness to lend money, and the form of his contracts with a borrower is strictly prescribed, and prescribed having regard to what the House normally understands as moneylenders' contracts. He is prohibited also from making any charge for the costs incidental or relating to the negotiations which lead up to the making of a, loan. There are in these Acts certain statutory exemptions, but the proposed company, being a new arrival on the field, does not fall strictly within any of the exemptions in the Acts.

Mr. MABANE: Not those under Section 6 (c)?

Mr. MORRISON: No, and if what my hon. Friend has in view is a statutory company empowered by Parliament to lend money—

Mr. MABANE: "Any body corporate, incorporated or empowered by a special Act of Parliament to lend money." That seems completely to cover this company.

Mr. MORRISON: It is a technical point, but this Bill does not empower the company to lend money; it empowers the Treasury to make an agreement with the company. The company is empowered to lend, not by Parliament, but by its memorandum and articles of association. We therefore consider it possible that this point may give rise to misapprehension, and therefore that we might have in future someone pleading unjustly the provisions of the Money-lenders Acts against this company, to which obviously they were never intended to apply. It is for that reason that we thought it best to place the matter beyond all doubt.

5.50 p.m.

Mr. GARRO-JONES: There is still one point on which I think the Committee would like to have some information, and that is with regard to the rather strangely worded phrase in this Clause which reads:

If the company is so incorporated as aforesaid in accordance with arrangements approved by the Treasury.
What arrangements have the Treasury in mind? They have first, to ensure that the objects of the Bill will be fulfilled. We have had the hon. Member for Farnham (Sir A. M. Samuel) expressing the horror which we expect from a banker at the prospect of lending money on long terms. He said, "Will you get people asking you for advances to put up a factory and machinery?" Of course, you will get people coming to ask for these facilities. If they were facilities which they could get through the ordinary financial machinery, they would not come to this company. I therefore want to ask whether the Treasury will make certain that the board of this company will not be constituted of what are known as bankers of the old school, because, if so, that will hamper the operations of the company and the objectives of the Bill. My second point is the one which will presumably be dealt with in the memorandum and articles of association. I should have preferred that we have seen the memorandum and articles of association ourselves, but if that is not to be the case, will the Treasury see them, and, if so, will the Financial Secretary be so good as to tell me whether they propose to approve a Clause entitling the company to borrow? The Chancellor of the Exchequer was busily engaged when I made this point previously, but I should be glad to have it cleared up, because upon that point depends how much money the company can lend.

Mr. BENSON: Will the Financial Secretary or the Chancellor explain the reference to 10 years? I do not think the Committee is clear to what the limit of 10 years applies.

Mr. CHAMBERLAIN: Is this on Clause 2?

Mr. MABANE: I beg leave to withdraw my opposition to the Clause.

Mr. GARRO-JONES: On a point of Order. I inquired about certain specific points, and the hon. Member for Huddersfield (Mr. Mabane) has asked leave to withdraw his objection to the Clause but I object to that until I have had an answer. I shall be glad, Captain Bourne, if you will allow the Minister to give


me an answer to the extremely important points which I put. They have been put before, but I have not yet had an answer.

The DEPUTY-CHAIRMAN (Captain Bourne): It is doubtful if those points arise on this Clause at all.

Mr. GARRO-JONES: Perhaps you would allow me to convince you that they do, Captain Bourne. I said that in this Clause appear the words:
If the company is so incorporated as aforesaid in accordance with arrangements approved by the Treasury. …
I wish to ascertain what arrangements are going to be approved by the Treasury. Does it mean that the Treasury must see the memorandum and articles of association?

The DEPUTY-CHAIRMAN: The hon. Member has overlooked the fact that these words also occur at the beginning of Clause 1. On the question that that Clause should stand part of the Bill, he might have been in order in raising his points. He might again be in order in raising them on the Schedule, but obviously he cannot do so on this Clause.

Clause 3 (Short title) ordered to stand part of the Bill.

SCHEDULE.—(Matters to be provided for in an agreement between the Treasury and the Special Areas Reconstruction Association Limited.)

5.55 p.m.

Mr. MAINWARING: I beg to move, in page 3, line 8, to leave out paragraph 2.
The paragraph reads:
2. The payment by the Treasury to the company in respect of every year of the amount expended by the company in administration expenses in respect of that year, or of a contribution of twenty thousand pounds towards those expenses, whichever is the less.
I think there might be given an opportunity to the Government to indicate the nature and extent of the services which have to be rendered in return for this substantial sum of money, because the company which is to be incorporated is not a great operative company, but purely a lending concern, and I do not know to what extent its activities will be carried on. I have no idea what premises

it is likely to require, what staff it will engage, or what general expenses one can reasonably expect to be incurred by the company. We are informed that the maximum unit of loans to be granted in each case will be £10,000, and if the whole amount were used up that would mean 100 clients. Is it reasonable to expect them, therefore, to go to an expenditure of £20,000 a year? It is true that the words "or … less" appear in this paragraph, but the very fact that the Treasury commits itself to providing £20,000 if necessary is a very large inducement for it to do so, and I think there ought to be proper safeguards laid down.
I should like to know what the Chancellor of the Exchequer has in mind. Unless there is a reasonable amount of services rendered to justify this expenditure, they are laying themselves open to a sum of public money being spent for which there will be no return. One has to realise that the nominal capital is £1,000,000. I have heard no one suggest that it will be turned over in one year or even in three, four, or five years, but the £20,000 may be expended each year in the circulation of this £1,000,000, and it will be an extraordinary situation if we set up a Corporation in the hope that it may circulate £1,000,000, and it fails to do so at least for five years, and we find that it is expending at the same time a sum of money greater than it has been able to lend.

5.58 p.m.

Mr. CHAMBERLAIN: The hon. Member will appreciate that the £20,000 is a maximum limit and that the amount which the Treasury will contribute is the actual amount of the expenses, provided that that amount does not exceed £20,000. If you are to have a limit at all, you must obviously have a limit which will not hamper the operations of the company, and the limit, therefore, has to be put at that level which contemplates the maximum activity on the part of the company. The hon. Member is quite right in supposing that the company is not likely to begin with an administration bill of anything like £20,000, and as the Treasury is going to make this contribution, naturally the Treasury will have an opportunity of seeing, through its agents, how this money is being expended and of making sure that it is being expended properly.
The hon. Member must also bear in mind that although this company is not an operative company in the sense that it is carrying on the business of manufacture or distribution, the business of lending, in the peculiar circumstances which we are contemplating here, is not by any means a simple matter. We are contemplating, not the ordinary risk scheme of financial houses, but something going beyond that, something which requires, therefore, a particularly careful and detailed investigation of the circumstances in each case. If £10,000 is the limit, in the ordinary case, of the amount which may be advanced to any particular firm, the hon. Member may be sure that the average amount of loan will be considerably less than £10,000, and if, therefore, the operations of the company turn out to be successful, and their help is found to be in great demand, then they will be investigating possibly the affairs of a large number of concerns in a number of different areas. The hon. Member must remember that South Wales is not the only Special Area, and that we have to consider other Special Areas as well. When all these things are put together and it is considered that each area has to have a staff engaged in the work of investigation, it will be realised that this is a case where administration expenses may be expected to be higher than would be the case in an ordinary commercial venture. Seeing that the object of the company is not to make profits, but, rather to fulfill a matter of public interest, I think the hon. Member will agree that it is proper that the Treasury should be authorised to pay these expenses.

6.1 p.m.

Sir SAMUEL CHAPMAN: I desire to suggest to the Chancellor that it will be necessary, if he is to apply this scheme to Scotland, to consider that companies may be floated in different directions from that in which they will be floated in England. There is a valuable belt of minerals—

The DEPUTY-CHAIRMAN: I do not think that that question arises on this Amendment.

Mr. MAINWARING: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

The following Amendments stood upon the Order Paper: In page 3, line 17, at the end, insert:
It shall be permissible for the company to invest all or any part of its reserves in further loans."—[Mr. Ede.]
4. Loans by the company shall be made at a rate of interest not exceeding 3½ per cent. per annum."—[Mr. E. J. Williams.]
4. If in the opinion of the company it is desirable for the purpose of attracting loans, a rebate in the rate of interest of 1 per cent. per annum on the amount of any loan or loans shall be made for a period not exceeding two years from the date of the granting of such loan or loans and such rebate shall be regarded as an expense of administration."—[Mr. Benson.]

The DEPUTY-CHAIRMAN: The Amendment in the name of the hon. Member for South Shields (Mr. Ede) is out of order as it imposes a charge. With regard to the next two Amendments in the name of the hon. Member for Ogmore (Mr. E. J. Williams) and the hon. Member for Chesterfield (Mr. Benson), it will be rather difficult to disentangle them as they both raise in a different form what is substantially the same point. I, therefore, propose to call the Amendment in the name of the hon. Member for Ogmore, and to allow both Amendments to be argued upon it.

6.4 p.m.

Mr. E. J. WILLIAMS: I beg to move, in page 3, line 17, at the end, to insert:
4. Loans by the company shall be made at a rate of interest not exceeding three and a half per cent. per annum.
There seems to be a flaw in the Bill which I am endeavouring to put right by this Amendment. When the company is being formed the £1,000,000 capital is to be made up of £900,000 cumulative shares and £100,000 ordinary shares bearing 3½ per cent. and 3 per cent. interest, respectively. Nothing is said in the Bill as to the rate of interest to be paid by the people who borrow from the company. After listening a few moments ago to the Parliamentary Secretary, it seemed to me that the Treasury had entirely forgotten the persons who are expected to borrow from the company. This is not an operating company. Its function is to lend money to people who desire to promote industries in the distressed areas. The purpose of my Amendment is to provide that when money is borrowed the maximum rate of interest charged is equivalent to that paid on the cumulative


shares. The Government have been talking a great deal about cheap money, and if they really want to help the Special Areas, surely they ought to make provision to see that the persons who desire to set up industries should have money at the cheapest possible rate. Either they must have that or the Government will have to be prepared to subsidise them. I gather that the company will not desire to advance money as a subsidy.

6.7 p.m.

Mr. BENSON: The object of my Amendment is merely an extension of the object of that in the name of the hon. Member for Ogmore (Mr. E. J. Williams). We on this side have more than once expressed our scepticism as to whether this Bill is likely to have any effect. Assuming that the money is raised—and I understand from the Chancellor that the Government have a definite promise that it will be—the next question is whether it will be used. The establishment of a business in a depressed area is not necessarily an easy matter. One might describe such an area, from the point of view of a business man, as a non-economic area. There is a tendency for new businesses to drift south, for the high incidence of rates in the Special Areas as compared with the incidence in the south of England or the more prosperous parts is a serious matter. Another point is that the distressed areas are separated from their markets. It is considered, therefore, that he would be a bold man who started a commercial venture in a depressed area. The object of these two Amendments is to offer some inducement, for the offer of cheap capital may make all the difference between a business being started and not being started, and between the Bill being somewhat of a success and being a failure.
With regard to the suggestion in my Amendment that a rebate of 1 per cent. shall be charged as an expense of administration, we realise that with the maximum rates of interest to be paid on the preference shares and the ordinary shares very little margin is left if the loan interest is limited to 3½ per cent., as is suggested by my hon. Friend's Amendment, and the company will probably find it very difficult, if not impossible, to earn an adequate interest on its loans to pay the rates of interest which are set forth

in the latter part of the Schedule. It is for that reason that we wish this rebate to be charged as a cost of administration. Assuming that the expenses of administration are not too high, and having in mind all that the Chancellor said about the difficulties which this company is likely to experience in administration, I think it is possible that these limits in the interest charged can be accepted and the possibility of having a rebate can be accepted by the Treasury, and the company would still be able to remain solvent.

6.13 p.m.

Sir A. M. SAMUEL: I wonder whether the hon. Gentleman who moved the Amendment realised the effect of placing the interest at a maximum of 3½ per cent. Has he left out of calculation that if the company is to pay 3½ per cent. on the preference shares there will be nothing left for working expenses, which will then fall on the taxpayer, or for reserves? In other words, the hon. Gentleman wishes for a further subsidy in addition to the amount provided for working expenses in the Bill. If only 3½ per cent. or less is earned upon the loans, there will be nothing left as a margin for working expenses. I would like to analyse the principle which the two hon. Members have in mind. Do they really think that in the distressed areas it matters very much to a person who is seeking to open a business in a risky enterprise whether he pays 3½ per cent. or 5 per cent.? Do they not realise that the important question is whether he can get capital or credit with which he can deal? Suppose a man borrows the full £10,000, let us see where it is bringing us. Let us see the effect of limiting the annual rate of interest to 3½ per cent. Suppose he is able to borrow £10,000 for an undertaking which is not likely to be very prosperous; he would not have been able to get the money at all in the ordinary way from a bank, which has to lend depositors' money. In this case it is a national eleemosynary proposal to help distressed areas with the money required for industry, which otherwise could not be provided. In the ordinary way in trade the time that you need to turn the goods that your men have made into money is about 30 days or 60 days or 90 days. I do not believe giving credit for


six months is a wholesome way of doing business. People in home markets who want six months credit are only carrying on their business on the capital of manufacturers. Ninety days is long enough.

Mr. BENSON: Surely the object of this Bill is not to offer short term credits to traders, but for the establishment of businesses. May I ask the hon. Gentleman whether he suggests that the common assumption that cheap money is a stimulus to trade does not apply to the Special Areas.

Sir A. M. SAMUEL: There is a great deal of reservation to be made in statements about very cheap money. The cry for very cheap money on behalf of manufacturers is a spurious cry and the manufacturers are not behind it. It does not very much matter to a manufacturer who borrows £10,000 for financing a contract for goods to be made, or who wants to discount a bill for £10,000 at 90 days for goods he has just sold whether he pays 3½ or 5 per cent. per annum interest. The difference for 90 days amounts to no more than £37 10s. It sounds very impressive to talk about cheap money and to say that to increase the rate of interest from 3½ per cent. to 5 per cent. is a 40 per cent. rise, but there is really nothing in it. It is only an arithmetical calculation, a theoretical statement, smashed up by the working facts of the case. It is like talking about a principality reducing its army by 50 per cent., when its army originally numbered only two men has been reduced to one man.
Whether the manufacturer is asked to pay 3½ per cent. or 5 per cent. on £10,000 makes, as I have said, a difference of exactly £37 10s. for 90 days, and that is only a difference which would concern an accountant or a statistician. What really matters to the manufacturer is the possibility of getting an order worth £10,000, not the £37 10s. more or less interest. If he can turn over the £10,000 four times by getting orders for £40,000 in a year the only difference in the cost for interest would be £150. In a factory dealing with orders of that size probably 150 to 200 men would be engaged and the £150 would not amount to the wages of a doorkeeper. The 1½ per cent. difference in the annual

interest is nothing to make any great fuss about. The point is that a man in the Special Areas who wants to set a factory going should have the money with which to do so. This Bill provides it. It is easy enough to make goods when he has got the money or credit. All that has been said about very cheap money really does not affect the case of manufacturing before us. It is based on theory. The practical need is to get the money and make the goods and not the difference of 1½ per cent. interest; but what is more important than all is to be able to sell the goods after they have been made. That is the problem.

6.18 p.m.

Mr. MAINWARING: The hon. Member for Farnham (Sir A. M. Samuel) has been dealing with this problem entirely from the point of view of commercial credit, whereas the purpose of the Bill is the provision of capital credit. It is the capital with which to start industries that is needed, but he was talking about the commercial credit required when the factory is in existence and the machinery installed and the produce ready to go to market. He is starting at the wrong end.

Sir A. M. SAMUEL: If the hon. Member is talking about starting commercial enterprises much of the £1,000,000 would go in five minutes—if used for erecting buildings or machinery—and little would he left for financing production.

Mr. MAINWARING: That is precisely what we on this side have said all along.

6.20 p.m.

Mr. MABANE: I rise to a point of Order. I am sorry that I have been absent from the Committee for a few minutes, but I wish to suggest to you, Captain Bourne, that the two Amendments which we are now considering are both out of order, on the ground that both may have the effect of increasing the charge on public funds. I am particularly interested in the second of the two Amendments, which provides that a certain rebate in the rate of interest may be given, and that such rebate shall be regarded as an expense of administration. That might increase the amount which the Treasury have to pay, because in the second paragraph of the Schedule it is provided that:
The payment by the Treasury to the company in respect of every year of the


amount expended by the company in administration expenses in respect of that year, or of a contribution of twenty thousand pounds towards those expenses, whichever is the less.
With regard to the first Amendment, if the rate of interest is limited to 3½ per cent. per annum whereas the association might have been able to secure 7 per cent. per annum, the contingent loss incurred by the Treasury might thereby be increased. I urge that both Amendments may have the effect of increasing the charge.

6.21 p.m.

Mr. SHINWELL: I submit that we have not yet reached paragraph 6 of the Schedule which refers to the rates of interest to be paid to the preference shareholders and to the ordinary shareholders and that therefore the hon. Member's objection cannot arise. When we come to paragraph 6 will be time enough to deal with it. Further, I submit that there is no reference either in the Bill or in the Schedule to the rates of interest to be paid on the loans to be furnished by the company and therefore it is not out of order to present an Amendment dealing with that precise point.

6.22 p.m.

Mr. K. GRIFFITH: Surely the hon. Member for Huddersfield (Mr. Mabane) is wrong about the first point, because even if the Amendment in the name of the hon. Member for Chesterfield (Mr. Benson) did increase the administration expenses beyond £20,000 it would not increase the charge to the State, as the company would have to bear the rest of the expenses. [HON. MEMBERS: "No!"] In paragraph 2 we fix the £20,000 as a maximum, and nothing that we do in. reckoning other charges as administrative expenses will make the slightest difference.

6.23 p.m.

Sir A. M. SAMUEL: I think the hon. Member for West Middlesbrough (Mr. K. Griffith) may be wrong. My right hon. Friend the Chancellor of the Exchequer said it was an amount up to £20,000. If, therefore, charging only 3½ per cent. does not pay for expenditure in respect of running the association, expenses would be rather larger than they would be otherwise, and, consequently, the amount to be paid in by the Treasury up to a total

of £20,000 would be larger than otherwise. I thought at first that this Amendment was out of Order; if the 3½ per cent. is not sufficient to provide the expenses of running the association I submit that the point of Order made by the hon. Member for Huddersfield (Mr. Mabane) is sound.

Mr. BENSON: With regard to the question of 3½ per cent., I would refer you, Captain Bourne, to paragraph 6 of the Schedule, in which it is shown that the repayment to the Treasury takes precedence over the payment of interest either to the preference or to the ordinary shareholders, so that any loss involved through inability to pay 3½ per cent. or 3 per cent. interest does not fall upon the Treasury.

6.25 p.m.

The DEPUTY-CHAIRMAN: I think the hon. Member for Huddersfield (Mr. Mabane) has slightly misapprehended the effect of the Financial Resolution on which the Bill is founded. The question whether a particular Amendment would or would not increase the charge upon the Treasury is immaterial at this stage, so long as it comes within the scope of the Financial Resolution. With regard to the point he raised on the Amendment which is being discussed along with the Amendment now before the Committee, it is true that if that Amendment were accepted it might make the annual contribution of the Treasury an amount up to £20,000 in respect of the administrative expenses, but a sum up to that figure has already been authorised by the Financial Resolution, and therefore an Amendment which would bring the amount up to that amount is in order. As to the Amendment now under discussion, under paragraph (d) of Section 1 of the Financial Resolution various provisions are made for the payment of losses, and there is no limit placed by that Resolution on the amount which may fall on the Treasury, except that it is not to exceed more than 25 per cent. of the losses incurred either in respect of the original or of additional loans. Therefore, if the effect of the Amendment of the hon. Member for Ogmore (Mr. E. Williams) were somewhat to limit the profit, or even to convert into a loss the operations of the company, the liability of the Treasury up to one-fourth of that is covered by the Financial Resolution, and the Amendment is in order.

6.27 p.m.

Mr. MAINWARING: To continue the reasons for supporting the Amendment of my hon. Friend the Member for Ogmore (Mr. E. J. Williams), we have to bear in mind that we are endeavouring to deal with the situation as it exists in depressed areas. So badly depressed are they that the House has come to the conclusion that only the most unorthodox finance will succeed in lifting these areas out of their depression. The Bill is unorthodox finance, and, had orthodox finance been capable of meeting the situation, would never have been introduced. It is an amazing thing that the hon. Gentleman opposite should suggest that it will be possible for this association to get a return of 7 per cent. upon its capital.

Sir A. M. SAMUEL: I did not suggest that.

Mr. MAINWARING: Then it was the hon. Member for Huddersfield (Mr. Mabane). Everybody knows that it has been utterly impossible to induce business men to go to the depressed areas and venture their money. That is the reason why Parliament is now considering ways and means of inducing them to go there. My complaint is that the inducement is being offered to the wrong parties, is being offered to those who will form this association.

The DEPUTY-CHAIRMAN: This is not the occasion to discuss the merits or the demerits of the Bill, but only whether the operations of the association should be limited in the way proposed.

Mr. MAINWARING: I must beg pardon for referring to that. My intention was to point out the necessity of an inducement being given to the operating companies which will be formed, to the people who will be the clients of the association, those whom we expect not merely to risk the £10,000 which they will have obtained on loan from the association but a good deal of their own money as well. If they secure a loan of £10,000 they may also risk £10,000 of their own and are expected to fructify the £1,000,000 of this association. I confess to being a most profound sceptic with regard to this association, but at the same time no one can be more desirous of making it a success, because

I realise the necessity of encouraging people who will come forward with their own capital to get additional capital. I see the force of giving them the least possible in the way of interest charges upon the capital that they borrow. It will be very difficult for the Financial Secretary to justify anything of this kind. If we are serious in our intention to bring light into the darkness of the depressed and Special Areas, we cannot leave the company to charge any rate of interest that it chooses, and this is, therefore, a most reasonable Amendment to limit the rate of interest.

6.31 p.m.

Sir G. ELLIS: To put such a provision in the Bill would be to destroy its whole object. The corporation would not get any capital. I ask hon. Members who are supporting the Amendment to think for a moment what they are asking of the people who, because they hope to assist the depressed areas, are to be persuaded to enter into this company. Hon. Members propose to begin by saying to the prospective shareholders: "You are not to charge sufficient interest to pay more than what the shareholders get." It follows from that, that it will be impossible to build up any reserve. You are saying to every prospective shareholder in the company: "It is absolutely certain that one day you will have to meet 75 per cent. of the losses of this company." In those circumstances who will put his foot into the concern?

6.33 p.m.

Mr. SHINWELL: The hon. Member for Farnham (Sir A. M. Samuel) professes to be interested in the Special Areas problem. If he is, he must be prepared to accord special treatment to those areas, and that is all that we are asking for in the Amendment. I understood his argument to be that there is hardly any difference worth considering between 3½ per cent. and 5 per cent. I wonder if he would use that argument in relation to financial transactions throughout the country?

Sir A. M. SAMUEL: That is quite a different matter. A difference of one-half of one per cent., in dealing with financial transactions, the buying and selling-of raw materials, or speculating in stocks and shares, is of immense importance, but when you deal with manufacturing operations and the


buying and selling of goods, it does not matter very much upon a £40,000 order, or rather upon £40,000 as the turnover of a year, using £10,000 four times turned over, whether the rate of interest is one-half of one per cent. more or less. Even if you get your money for nothing it will make very little difference whether you pay any interest at all. It is not a matter of interest, but of getting money at all to make the goods and then being able to sell them.

Mr. SHINWELL: The hon. Member has repeated what he said, and has not strengthened his case. What we are asked to believe is that this slight difference in the rate of interest in a commercial undertaking is of very little consequence.

Sir A. M. SAMUEL: I agree.

Mr. SHINWELL: That is what the hon. Member believes. I ask him whether he would apply that reasoning to financial transactions throughout the country as a whole.

Sir A. M. SAMUEL: It is a different case. Finance is not industry.

Mr. SHINWELL: His answer is that he seeks to apply it to this particular case, and not to every commercial transaction.

Sir A. M. SAMUEL: Not to all commercial manufacturing transactions.

Mr. SHlNWELL: Our submission is that the peculiarity of the undertakings about to be established demands, in the special circumstances, special treatment, and that is a, case for the limitation of the rate of interest and the provision of cheap money. The hon. Member for Farnham seems to think that in small business undertakings, such as we are specially concerned with in this Measure, where the total volume of trade amounts to, say, £40,000 a year, and the rate of interest varies between 3½ per cent. and 5 per cent., that variation may mean no more than a difference of about £150. He forgets that we are not dealing here with one commercial undertaking involving a capital outlay of £40,000, or with transactions of that amount covering a period. of 12 months, but with a great number of undertakings and, as we have heard this afternoon, an amount of capital which may reach many millions of pounds. Therefore, a variation from 3½

per cent. to 5 per cent. in the rate of interest may considerably influence the decisions and the general operations of those who wish to come into the Special Areas. I would beg the hon. Member not to regard this question of the variation of the rate of interest as a trifling matter. It is one of very great substance, and, in my submission, is the point of real substance in the Bill.
The hon. Member for Ecclesall (Sir G. Ellis), who usually speaks with great knowledge upon industrial and financial matters, was, I fear, a little out of his depth when he ventured to address his argument to my hon. Friend the Member for East Rhondda (Mr. Mainwaring). He seems to think that the profit to be returned to the cumulative preference shareholders and the ordinary shareholders varies between 3 per cent. and 3½ per cent. and that it is essential to provide a high rate of interest on the lines of the contemplated business undertaking.

Sir G. ELLIS: I did not say so and I do not think so. What I said was that when you have to gay out as much as you are getting in there is no margin, and that when there is no margin there can be no reserve. If you wish people to lend you money when they know there is a certain loss, you destroy the very object you have in view.

Mr. SHINWELL: I am much obliged to the hon. Member. What I said about his argument was on all fours with what he has just said. His argument amounts to this: If the profits to be paid out to the preference shareholders are no higher than the rate of interest, and vice versa, obviously those shareholders will not come in with their money. The hon. Member followed that with the contention and, as he thought, a reminder to us, that there would be no reserve. He is quite mistaken. I put it to the Financial Secretary, and I hope he will be good enough to furnish a reply, whether it is not the fact that the Measure includes a reserve fund to be provided by the Treasury.

Sir G. ELLIS: Not to the full extent.

Mr. SHINWELL: Up to £100,000 per annum. It is true that the reserves are to be returned to the Treasury if there are no losses during the period in which


the operations are carried on, but the reserves are provided for, and from those reserves it is within the power of the company to meet such variations in the rate of interest as would make all the difference between running a commercial transaction in a depressed area on financially sound lines with cheap money, and running it in an almost impossible way.

Sir G. ELLIS: Let me try to put my point again. When you are running an undertaking in such a way that losses are certain, if you have no provision for reserves the shareholders will be bound to meet their proportion of losses, just as a trader is bound to do so. All I say again is that you are asking the prospective shareholders to provide money in the knowledge of certain loss in the future.

Mr. SHINWELL: It seems to me that that is the essence of the scheme. That was provided for from the beginning of these discussions. Upon the Financial Resolution, in the Second Reading Debate and to-day, in the discussion of various Amendments, we have heard of nothing but the possibility of losses being sustained.

Sir G. ELLIS: I agree with the possibility, but the Amendment makes it a certainty.

Mr. SHINWELL: The hon. Member for Huddersfield (Mr. Mabane) faced the possibility of sustaining a loss not of £1,000,000 but of 100,000,000, when his Amendment sought to restrict appeals to the Treasury in that regard. That loss will be sustained is the essence of the scheme. Why should not losses be sustained? Hon. Members talk about protecting the interest of the people who have to provide money, and at the same time talk about the active, public-spirited persons who are to venture their capital. I would remind the hon. Member for Farnham (Sir A. M. Samuel) that the Government have provided subsidies without any question of limitation of rates of interest. Now we are being told of the dreadful possibility of public-spirited individuals, to whom the Chancellor referred, not being attracted because the rates of interest are too low.
We have been very moderate with regard to the Amendment. It is time that hon. Members on this side of the Com-

mittee expressed themselves without the restraint that has characterised their discussions so far. It is about time that hon. Members understood that this is, as we said at the outset, a miserable Measure, yet they are trying to make it very much worse while wrapping it all up with talk about public-spirited individuals who are simply dying to do something for the people in the depressed areas, straining at the leash, and who yet need to be very careful not to put down their capital because they are going to have, not a mere 3½ per cent. return, not a Consols return, but a gilt-edged return. They are to see to it that they get the highest rate of interest that they can secure for the investment of their capital. We hear about the losses to be sustained, but let it not be forgotten that there is a Treasury guarantee of 25 per cent.
Too little has been said about one point, to which I invite the attention of hon. Members. When applicants come to the company, as they are expected to do, and ask for loans, they will be asked, presumably, for security; or are we to understand that those who apply for loans for the purpose of setting up business undertakings in the special areas will not be called upon to provide security? That would be an unheard of thing in this country. If they are called upon to provide security, and if that security is combined with a 25 per cent. guarantee, it seems to me that we ought not to bear so much as we have heard this afternoon about gestures to public-spirited individuals. If this scheme fails to achieve its intended purpose, namely, to establish small and profitable undertakings, providing employment for people who cannot be absorbed in their old occupations, it will be largely because the rates of interest are too high. Cheap money is the essence of the case, and cheap money ought to be provided for. I would remind the Committee that we have not yet come to paragraph 6 of the Schedule, which provides for the dividends to be paid to the shareholders. When we come to that paragraph, we may have something to say, and, therefore, our submission with regard to; limitation of the rate of interest holds good at this stage.

6.47 p.m.

Mr. K. GRIFFITH: The hon. Member for Seaham (Mr. Shinwell), who has


discussed this matter so reasonably so far, has rather misunderstood the Bill as it stands at this point. He has spoken with scorn of the public-spirited individuals who want more than 3½ per cent. I hope they do not want more than 3½ per cent., because they cannot get it under the Bill as it is drafted. I agree that we have not come to paragraph 6 of the Schedule, but for the present we are bound to imagine that it will be passed in the form in which it stands, and it is really there that the security against profiteering is provided. The hon. Member may think that even 3½ per cent. is profiteering; I do not know what he thinks about that figure, but at any rate it is the limit of what they can get, and any suggestion that people are not going to be satisfied with that figure, but are going to demand more, is departing altogether from the text of the Bill. It is the company that will be able to get more on its loans, apart from the Amendments that we are now discussing, and I suggest that, since profiteering is guarded against, as I suggest it is, it would not be reasonable to make the return less than 3½ per cent., in view of the limited security in what is admittedly a hazardous series of operations in different parts of the country. I think that the company must be left to make reasonable commercial arrangements having regard to what they consider to be the prudent amount that they must get in order to cover the risks that they are undertaking. I think the hon. Member for Ecclesall (Sir G. Ellis) was quite right in suggesting that to insist on these Amendments would not really advance the cause that we have at heart. Hon. Members above the Gangway are pessimistic about this scheme. I am fairly pessimistic, but I must deplore the turn that the Debate is now taking. A few more speeches such as those we have heard on these Amendments would make prospective investors certain that it would be a suicidal policy for them to invest a single penny.

6.50 p.m.

Sir A. M. SAMUEL: The hon. Member for Seaham (Mr. Shinwell), in his lyrical outburst, departed entirely from the text of the Schedule. With a view to getting people to lend the capital at 3½ per cent., paragraph 3 of the Schedule provides for:
The setting aside by the company of reserves against losses.

To charge borrowers no more than 3½ per cent. would be to depart immediately from one of the fundamental reasons why the company should be set up, and why people should lend their money at 3½ per cent. As my hon. Friend the Member for Ecclesall (Sir G. Ellis) has said, if you do not get from borrowers at least 3½ per cent. there is not the slightest hope that the company will be able to set up the reserves which are required not only to cover the business risks of an undertaking which is highly speculative, but to ensure the healthy life of every good business scheme in commerce. It is laid down in the Schedule that reserves shall be provided, and for that reason I feel sure that the hon. Gentleman must have overlooked paragraph 3.

6.51 p.m.

Mr. GARRO-JONES: In spite of what has been said by the hon. Member for West Middlesbrough (Mr. K. Griffith) and others, I still think it would be an excellent thing to have a definite restriction on the amount of interest to be charged to borrowers. The primary object of the Bill is, not to provide a satisfactory financial proposition for the company, but to make money available on such terms as will enable new industries to be commenced in the Special Areas, and, if that is not possible, when the rate of interest is higher than 3½ per cent., we must make that the limit, and make any consequential alteration in the Treasury guarantee and so on. I was astonished to hear the hon. Member for Farnham (Sir A. M. Samuel) making his speeches about the small consequence of the difference between interest rates of 3½ and 5 per cent. on borrowed money. That is the sentiment of a banker, not of a manufacturer. To-day the manufacturer, more particularly in a depressed area, has to watch every penny of every charge that goes through his books. On a turnover of £40,000 a year, the difference between 3 per cent. and 5 per cent. amounts to £800, or more than the manufacturer pays for his rent or his power. It may make all the difference between a profit and a loss, and therefore I regard the difference between interest at 3½ and interest at 5 per cent. as a vital point in the Bill.

Sir A. M. SAMUEL: The hon. Member's arithmetic is wrong.

Mr. GARRO-JONES: Will the hon. Baronet give us the figure?

Sir A. M. SAMUEL: On a 90 days' credit of £10,000, which is turned over four times in the year, making a total turnover of £40,000, the difference between 3½ and 5 per cent. represents £150.

Mr. GARRO-JONES: The hon. Baronet is making the facts fit his argument. I stated that the difference between 3 per cent. and 5 per cent. per annum represents £800. I was not speaking about 90-day bills. These people are not going to borrow this money for 90 days. That is another of the hon. Gentleman's misconceptions. He believes that this is a Bill to provide short-term credit, but it is nothing of the kind. Moreover, the suspicions of the Financial Secretary also must be aroused, because Members have said that these are not loans which are going to be granted in ordinary commercial circumstances. They are going to be granted in districts where trade is bad, where rates are high, where money cannot be borrowed in the ordinary money market or from the banks. What guarantee have we that the directors of this company are not going to cite all these facts to prospective borrowers, and say to them, "We cannot lend you money at the same rate that the Midland or some other bank will charge; you will have to pay us 1½ or 2 per cent, extra, to meet the greater risk we are running?" What chance will the poor borrower have to cite the Treasury guarantee and all the other safeguards for the people who are going to put up the money for this lending company?
After what we have heard, it is all the more vital that there should be some restriction of the rate of interest. I believe that 3½ per cent. is the rate that these industries could properly stand. If it is thought to be too low, let it be 4 per cent., or, at the very most, 4½ per cent., so that we may be certain that these borrowers will not be exploited. I hope the Financial Secretary will indicate that he does not approve of some of the sentiments put forward by some of his supporters, and will agree to some limit being placed on the rate that may be charged.

6.57 p.m.

Mr. EDE: It seems to me that the error into which the hon. Member for Farnham

(Sir A. M. Samuel) has twice fallen is due to the fact that he has not read the Preamble, which state: that the Bill is a Bill for dealing with long or medium-term periods. Surely the hon. Member does not call 90 days either a long or a medium term—

Sir A. M. SAMUEL: Medium, in manufacturing.

Mr. EDE: It is true that the financial transactions which I have to conduct are not in a depressed area, but in the Surrey County Council and the London and Home Counties Joint Electricity Authority, of both of which I am chairman, we call six months a short term. Certainly the instance, which the hon. Member has twice quoted, of the man who wants £10,000 to finance his transactions while he is realising on his manufacturing operations, and does that four times a year, does not represent the kind of credit that is primarily contemplated by the Bill; and from my knowledge of my constituency, which is in a distressed area, I do not consider that that is the kind of assistance which people there contemplate receiving, at any rate at this stage. What they desire is a long-term credit that will enable them to establish factories in these areas.
The special areas are not like the Great West Road, the Kingston By-pass, and other places where modern factories have been erected. The primary difficulty in the distressed areas is to get factories in which industries can be carried on under modern conditions, and, when a man is embarking on an enterprise of that nature, he needs something more than the credit that will be necessary to tide him over 90 days, even if he can get it renewed at the end of that period. I hope the Minister will agree to some limitation of the rate of interest. If 3½ per cent. is too low, will he suggest some figure, so that, before the House parts with the Measure, we may be assured that the company really is going to lend money to the kind of people who will be concerned in these areas?

6.59 p.m.

Mr. W. S. MORRISON: The hon. Member for Ogmore (Mr. E. J. Williams) and the hon. Member for Chesterfield (Mr. Benson) have made perfectly clear their points on these Amendments. They desire to see incorporated in the Measure some limit to the rate of interest that may be


charged by the company to its borrowers. There has been obvious, throughout some of the discussions that we have had, a tendency to confuse two things, namely, the interest which the shareholder can receive from the company—which is fixed at a maximum of 3½ per cent.—and the interest which the company can receive from its borrowers, which is not fixed. The hon. Member for Chesterfield said with some truth that he would be a bold man who would contemplate setting up a new industry in a Special Area, and he detailed with great force the factors which might be likely to deter a man from starting an industry in such an area.
I would ask him, however, to apply his own argument to the proposal which is now before the Committee. Equally he would be a bold man who would proceed to lend money for the commencement of an industry in a Special Area, particularly when the industry to which his attention is directed is one which cannot otherwise obtain financial facilities. If the hon. Member bears in mind that the company which we are contemplating is bold enough to undertake that enterprise, with a limit to its share-holders' profits of 3½ per cent., he can dismiss from his mind all elements of undue profit-making by this company in the transactions it is undertaking.

Mr. BENSON: I did not suggest there was any danger of profiteering by the shareholders. Their interest is limited. What we had in mind in putting down these Amendments was to try to fix some limit to the timidity of the Treasury and the desire of the Treasury to build up a reserve which would limit the Treasury losses.

Mr. MORRISON: I am glad we have reached the essential point that we can eliminate from our minds all suggestion that there is a motive of undue profit in the Bill. The hon. Gentleman need not be afraid of the timidity of the Treasury. This company will be able to grant what terms it pleases without the Treasury having anything to do with it. If the company is prosperous, its profits to its shareholders will always be limited, and it will be in a position to make more and more generous terms to those with whom it deals. I regret that I must counsel the Committee to reject the Amendment, for the reasons put forward by my

hon. Friend the Member for Ecclesall (Sir G. Ellis) and the hon. Member for West Middlesbrough (Mr. Griffith). Both hon. Members advanced against this Amendment reasons of the utmost cogency, and I do not think I can say anything that would add to the force of their observations. Supposing we were to accept this Amendment we should be in this peculiar position: This Bill is to deal with a particular type of borrower for whom we have found that ordinary financial provision is not obtainable. He is in the eyes of the normal and orthodox organisation not creditworthy, and we are proposing to erect this organisation to deal with him. If you put this Amendment in the Bill you would be conferring a lower rate of interest on the non-credit-worthy than the credit-worthy can obtain, and that is surely a thing which we do not desire to do.
I would ask the Committee to look at the Preamble. The whole idea is to try to assist certain industries which are not, for the time being, in a position to obtain financial facilities from banks or other institutions. With regard to the Amendment moved by the hon. Member for Chesterfield (Mr. Benson) the suggestion he makes is that you should charge a 1 per cent. rebate to administrative expenses. Unless the administrative expenses were well below £20,000 a year that would be of little or no value to the borrowers. It is only when those expenses fall below £20,000 that the amount payable by the Treasury varies, and this 1 per cent. would be paid by the Treasury. The real effect of what hon. Members are doing is to reduce the possibility of any reserve. The hon. Member for Ecclesall said it would destroy the possibility of there ever being any return. In so far as by any of these devices you limit the power of the company to lend you hamper the purpose for which the Bill is before the Committee. There is every intention that the interest charged to these borrowers will be the lowest that is possible to enable the company to function, and the Committee would be making a mistake if they were to seek rigidly to fetter the discretion of the company in this matter. It is a question which must depend on the circumstances of each borrower.

Amendment negatived.

7.9 p.m.

Mr. MABANE: I beg to move, in page 4, line 42, at the end, to add:
10. The appointment by the Treasury of one or more directors to the board of the company.
I gather from a reply the Chancellor made to a question I put to him that the Treasury were not averse to doing this, or something like this. I was a little disturbed by one sentence used by the Financial Secretary a moment ago, when he said that the company will be able to lend on whatever terms it likes without the Treasury having anything to do with it. If that is so, there is a very good reason for the acceptance of my Amendment. I do not think the Committee would like to see the company engaging in lending on such terms as it pleased without the Treasury having anything to do with it. It has been the practice in the past to appoint one or more directors by the Treasury when it has been engaged in lending money. The Chancellor said in the Second Reading Debate that the appointment of directors would be done in consultation with the Treasury, but that is not the same as having a director there to follow the day-to-day policy of the company. It may be objected that this will create another form of Government patronage, but there can be no substance in such an argument. I have every reason to hope that the Treasury will accept this Amendment.

7.10 p.m.

Mr. SHINWELL: I am glad to be able to support the hon. Member. This is the most substantial Amendment that he has put before us. It recognises the importance of Government intervention in a matter of this sort. It is a moderate and limited intervention, but it is the thin end of the wedge and to that extent it is acceptable to hon. Members on these benches. We have a precedent in the Anglo-Iranian Oil Company, where the Government appointed two of the directors, and therefore we can with all the more confidence accept this proposal. The importance of having a Treasury-appointed director lies in the supervision that he can exercise over the operations of the company on behalf of the Treasury. There has been something said about the negative attitude of the Treasury when demands are made on them for finance.

I am conscious of that, and I had experience of it in the last Labour Government. Nevertheless the advantages of a Government director on this board of management far outweigh the disadvantages, and I hope that the Financial Secretary, who has given us nothing this afternoon, will now at the last stage grant this very moderate concession.

Mr. K. GRIFFITH: I should like to join in the request. This is obviously a Bill in the operations of which there might be involved a loss of public money. Many hon. Members seem to think that it will involve such a loss. In any event it will be desirable to have a Government representative there, I hope to prevent such loss, but at any rate to see that it is as small as possible and that the company is conducted on the lines of public service.

7.13 p.m.

Mr. W. S. MORRISON: I am sorry to have to resist this Amendment. I would gladly have accepted it if I thought there was anything to be gained to the public by it. Hon. Gentlemen have supported it imagining that it would improve the company from the point of view of Government control. The appointment by the Government of directors is limited to two eases. One is when the company is engaged in carrying on some enterprise which is of profound importance to the problems of national defence, such as the Suez Canal or the oil company to which the hon. Member referred. The other case is that of companies under the Trade Facilities Acts, where the company requires assistance to strengthen it. Neither of these two considerations is relevant here. The hon. Member wishes to be assured that full information of the transactions of the company will be before the Treasury. That, I think, was also the object for which the hon. Member for Middlesbrough, West (Mr. Griffith) supported him. The hon. Member for Seaham (Mr. Shinwell) gave more dubious reasons in talking about the thin end of the wedge. I can assure the Committee that the Treasury will be consulted. I would like to make it clear to the Committee what these directors are to be. They are not to be directors in the ordinary sense of gentlemen who give their services for specified remuneration.

Mr. SHINWELL: Who are the directors to be?

Mr. MORRISON: I cannot tell yet.

Mr. SHINWELL: When will the hon. and learned Gentleman be in a. position to state who the directors are?

Mr. MORRISON: I think as soon as the company is formed.

Mr. SHINWELL: When will you form the company? I understand that a company consists of a directorate, or can you divorce a company from the persons who comprise its membership?

Mr. MORRISON: Certainly, a company can consist of shareholders, but the company is not yet in being, and I cannot be expected to say who the directors are. I can, however, tell the Committee that the ordinary directors are to receive no remuneration at all. The chairman and the managing director may get some remuneration, but the ordinary directors are to have none. They will give their time from a sense of public spirit.

Mr. SHINWELL: Have they agreed to do so?

Mr. MORRISON: We shall get gentlemen who will agree to it. That being so, and there being ample arrangements made between the Treasury and the proposed company to ensure that the most accurate information is given, I put it to the Committee that there is no necessity to have on the board of directors an actual representative of the Treasury in a case like this. I think the hon. Member who moved the Amendment was mostly concerned with the provision of information. That is there already. We shall get all the information we want. If he carries his apprehension a stage further and suggests that the directors might do something unorthodox, or something that goes beyond the provisions of the Bill, Article 8 of the Schedule specifically provides against it. If there is
any alteration in the memorandum and articles of association of the company which, in the opinion of the Treasury, affects the matters specified in the foregoing provisions of this Schedule,
the liability of the Treasury to make further payment ceases. That is a very strong check which the Treasury has against the entirely improbable contingency of any attempt by the directorate to exceed its powers.

Mr. K. GRIFFITH: Is that quite the same thing? That does not cover the

possibility of the company taking some action which is inconsistent with the memorandum and articles of association.

Mr. MORRISON: If the company were to take any action which affected what is set out in the Schedule, it would be a matter which would relieve the Treasury of liability. To take a case which is not likely to arise, if the company were of its own volition to increase its capital without the written consent of the Treasury, that is a matter that would affect the whole of the financial arrangements in the preceding paragraphs of the Schedule.

Mr. MABANE: That is not the kind of point that I had in mind. The company might decide to close down in one area, or to lend more freely than the Treasury wanted. What manner of consultation between the Treasury and the company, would take place?

Mr. GRIFFITH: The hon. and learned Gentleman has not really met my point. He is still confusing alteration of the memorandum and articles of association with infringement of them. What if they broke through the arrangement in the Schedule and paid 4 per cent.?

Mr. MORRISON: The powers and duties of the company are stated in the memorandum and articles of association and they cannot be altered without the consent of the Treasury. I cannot give the hon. Member for Huddersfield information as to the precise form which the communication of information will take, because the company is not yet formed. This Bill is the preliminary to its formation. But those who are engaged in the matter and are willing to co-operate in it are quite willing to give full information.

7.22 p.m.

Mr. GARRO-JONES: I hope the Committee will, for once, assert itself on this Amendment. We are all in sympathy with the hon. and learned Gentleman. The outlines of this agreement have, no doubt, been discussed with the financiers who are the promoters of the company. They have probably said to him, "We do not want a Government director on the board at any price. Leave it to us and we will carry out the arrangements satisfactorily and give you all the reports you want." But a Government director


on the board will not only give supervision as against any alteration of the memorandum and articles of association. There are certain other vital points about which the Government ought to be informed. The first is the payment by the Treasury of the preliminary expenses of the company and the expenses incidental to its winding-up. I know the directors need not be appointed until after the company is formed, but in practice they give a considerable amount of supervision to the actual formation of the company. The preliminary expenses are an amount which can be varied enormously, even in the formation of a company of this kind, and the very first act of a Government director might be to save the Treasury about £20,000.
The second point is in connection with the administration of the company's expenses. Those, too, might vary tremendously, and a Government director might be able to save an enormous amount of money. But there is a reason far more important than these savings why we should have a Government director on the board. It is of vital importance to the Government to know to what extent this experiment is being successful. The Chancellor of the Exchequer has told us time and again that the Government are going to watch this experiment with interest and, if it should prove

successful, they will take measures to expand it in other directions. I am not prepared entirely to trust the directors to give full information. Is there any objection in principle to a Government director being on the board? If that is so, let the Financial Secretary be frank about it and say, "In principle the City dislikes Government directors on a board and, therefore, I am not in a position to accede to your request." If that is not the position, there is no reason in logic or common sense why you should not have a Government director on the board. I am not at all impressed by the statement that the directors are to have no remuneration. I could find a hundred gentlemen in this House or elsewhere who would be delighted to have the standing and prestige of being put on a board of this kind. Having secretarial and office facilities, it would not take more than two hours a month to carry out their duties and the position is one of considerable prestige, influence and importance. The Financial Secretary is generally extremely frank, but in this case I think he is concealing a prejudice on the part of the City to having Government directors. I hope the Committee will not accept his refusal.

Question put, "That those words be there added."

The Committee divided: Ayes, 109; Noes, 221.

Division No. 174.]
AYES.
[7.29 p.m.


Acland, Rt. Hon. Sir F. Dyke
Frankel, D.
Leonard, W.


Adams, D. M. (Poplar, S.)
Gardner, B. W.
Leslie, J. R.


Adamson, W. M.
Garro-Jones, G. M.
Logan, D. G.


Alexander, Rt. Hon. A. V. (H'lsbr.)
George, Major G. Lloyd (Pembroke)
Lunn, w.


Attlee, Rt. Hon. C. R.
George, Megan Lloyd (Anglesey)
Macdonald, G. (Ince)


Banfield, J. W.
Green, W. H. (Deptford)
McGhee, H. G.


Barnes, A. J.
Greenwood, Rt. Hon. A.
MacLaren, A.


Burr, J.
Griffith, K. Kingsley (M'ddl'sbro, W.)
Maclean, N.


Bellenger, F.
Griffiths, G. A. (Hemsworth)
Mainwaring, W. H.


Benson, G.
Groves, T. E.
Mander, G. le M.


Broad, F. A.
Hall, G. H. (Aberdare)
Marklew, E.


Brooke, W.
Hall, J. H. (Whitechapel)
Marshall, F.


Brown, Rt. Hon. J. (S. Ayrshire)
Hardie, G. D.
Morrison, Rt. Hon. H. (Ha'kn'y, S.)


Burke, W. A.
Karris, Sir p. A.
Muff, G.


Charteton, H. C.
Henderson, A. (Kingswinford)
Oliver, G. H.


Chater, D.
Henderson, J. (Ardwick)
Owen, Major G.


Cluse, W. S.
Henderson, T. (Tradeston)
Paling, W.


Clynes, Rt. Hon. J. R.
Holland, A.
Parker, H. J. H.


Cocks, F. S.
Hopkin, D.
Pethick-Lawrence, F. W.


Compton, J.
Jagger, J.
Potts, J.


Cove, W. G.
Jenkins, A. (Pontypool)
Pritt, D. N.


Dagger, G.
Jenkins, Sir W. (Neath)
Ritson, J.


Dalton, H.
John, W.
Roberts, W. (Cumberland, N.)


Davies, S. O. (Merthyr)
Johnston, Rt. Hon. T.
Rowson, G.


Day, H.
Jones, A. C. (Shipley)
Seely, Sir H. M.


Dunn, E. (Rother Valley)
Jones, Morgan (Caerphilly)
Shinwell, E.


Ede, J. C.
Kelly, W. T.
Short, A.


Edwards, Sir C. (Bedwellty)
Kennedy, Rt. Hon. T.
Silkin, L.


Evans, D. O. (Cardigan)
Lathan, G.
Sliverman, S. S.


Fletcher, Lt.-Comdr. R. T. H.
Leach, W.
Simpson, F. B.


Foot, D. M.
Lee, F.
Sinclair, Rt. Hon. Sir A. (C'thn's)




Smith, Ben (Rotherhithe)
Thurtle, E.
Williams, D. (Swansea, E.)


Smith, E. (Stoke)
Tinker, J. J.
Williams, E. J. (Ogmore)


Sorensen, R. W.
Viant, S. P.
Wilson, C. H. (Attercliffe)


Strauss, G. R. (Lambeth, N.)
Watkins, F. C.
Woods, G. S. (Finsbury)


Taylor, R. J. (Morpeth)
Watson, W. McL.



Thorne, W.
Wilkinson, Ellen
TELLERS FOR THE AYES.—




Mr. Whiteley and Mr. Mathers.




NOES.


Acland-Troyte, Lt.-Col. G. J.
Ellis, Sir G.
Munro, P.


Adams, S. V. T. (Leeds, W.)
Emmott, C. E. G. C.
Neven-Spence, Maj. B. H. H.


Agnew, Lieut.-Comdr. P. G.
Emrys-Evans, P. V.
Nicolson, Hon. H. G.


Albery, I. J.
Entwistle, C. F.
O'Connor, Sir Terence J.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Erskine Hill, A. G.
O'Neill, Major Rt. Hon. Sir Hugh


Amery, Rt. Hon. L. C. M. S.
Evans, Capt. A. (Cardiff, S.)
Ormsby-Gore, Rt. Hon. W. G.


Anderson, Sir A. Garrett (C. of Ldn.)
Everard, W. L.
Orr-Ewing, I. L.


Anstruther-Gray, W. J.
Fremantle, Sir f E.
Palmer, G. E. H.


Aske, Sir R. W.
Furness, S. N.
Penny, Sir G.


Atholl, Duchess of
Fyfe, D. P. M.
Perkins, W. R. D.


Baldwin, Rt. Hon. Stanley
Ganzoni, Sir J.
Pickthorn, K. W. M.


Balfour, Capt. H. H.(Isle of Thanet)
Gluckstein, L. H.
Pilkington, R.


Balniel, Lord
Goodman, Col. A. W.
Ponsonby, Col. C. E.


Baxter, A. Beverley
Gower, Sir R. V.
Pownall, Sir Assheton


Beaumont, Hon. R. E. B. (Portsm'h)
Graham Captain A. C. (Wirral)
Raikes, H. V. A. M.


Bernays, R. H.
Grattan-Doyle, Sir N.
Ramsay, Captain A. H. M.


Birchall, Sir J. D.
Gretton, Col. Rt. Hon. J.
Rathbone, J. R. (Bodmin)


Blair, Sir R.
Gridley, Sir A. B.
Rayner, Major R. H.


Blindell, Sir J.
Grigg, Sir E. W. M.
Reed, A. C. (Exeter)


Bossom, A. C.
Grimston, R. V.
Reid, W. Allen (Derby)


Boulton, W. W.
Guinness, T. L. E. B.
Remer, J. R.


Bowyer, Capt. Sir G. E. W.
Gunston, Capt. D. W.
Rickards, G. W. (Skipton)


Brass, Sir W.
Guy, J. C. M.
Ropner, Colonel L.


Briscoe, Capt. R. G.
Hannah, I. C.
Ross Taylor, W. (Woodbridge)


Brocklebank, C. E. R.
Hannon, Sir P. J. H.
Rowlands, G.


Brown, Rt. Hon. E. (Leith)
Haslam, Sir J. (Bolton)
Ruggles-Brise, Colonel Sir E. A.


Brown, Brig.-Gen. H. C. (Newbury)
Hellgers, Captain F. F. A.
Russell, A. West (Tynemouth)


Bull, B. B.
Heneage, Lieut.-Colonel A. P.
Russell, R. J. (Eddisbury)


Burghley, Lord
Hepburn, P. G. T. Buchan-
Russell, S. H. M. (Darwen)


Burgin, Dr. E. L.
Holmes, J. S.
Salmon, Sir I.


Butler, R. A.
Hope, Captain Hon. A. O. J.
Salt, E. W.


Campbell, Sir E. T.
Hudson, Capt. A. U. M. (Hack., N.)
Samuel, Sir A. M. (Farnham)


Cartland, J. R. H.
Hudson, R. S. (Southport)
Samuel, M. R A. (Putney)


Carver, Major W. H.
Hume, Sir G. H.
Sanderson, Sir F. B.


Gary, R. A.
James, Wing-Commander A. W.
Sandys, E. D.


Cayzer, Sir C. W. (City of Chester)
Joel, D. J. B.
Scott, Lord William


Cayzer, Sir H. R. (Portsmouth, S.)
Jones, Sir G. W. H. (S'k N'w'gt'n)
Selley, H. R.


Cazalet, Thelma (Islington, E.)
Keeling, E. H.
Shepperson, Sir E. W.


Cazalet, Capt. V. A. (Chippenham)
Kerr, J. Graham (Scottish Univs.)
Smiles, Lieut.-Colonel Sir W. D.


Chamberlain, Rt. Hn. Sir A. (Br.W.)
Kimball, L.
Smith, Sir R. W. (Aberdeen)


Chamberlain, Rt. Hn. N. (Edgb't'n)
Kirkpatrick, W. M.
Smithers, Sir W.


Channon, H.
Lamb, Sir J. Q.
Somervell, Sir D. B. (Crewe)


Chapman, A. (Rutherglen)
Leech, Dr. J. W.
Somerville, A. A. (Windsor)


Chorlton, A. E. L.
Lees-Jones, J.
Somerville, D. G. (Willesden, E.)


Churchill, Rt. Hon. Winston S.
Leighton, Major B. E. P.
Southby, Comdr. A. R. J.


Clarry, Sir Reginald
Levy, T.
Stanley, Rt. Hon. Oliver (W'm'l'd)


Cobb, Sir C. S.
Lewis, O.
Stourton, Hon. J. J.


Colville, Lt.-Col. D. J.
Liddall, W. S.
Strauss, E. A. (Southwark, N.)


Cook, T. R. A. M. (Norfolk, N.)
Lindsay, K. M.
Strauss, H. G. (Norwich)


Cooke, J. D. (Hammersmith, S.)
Lloyd, G. W.
Strickland, Captain W. F.


Cooper, Rt. Hn. T. M. (E'nburgh,W.)
Locker-Lampson, Comdr. O. S.
Stuart, Hon. J. (Moray and Nairn)


Crookshank, Capt. H. F. C.
Loftus, P. C.
Sueter, Rear-Admiral Sir M. F.


Croom-Johnson, R. P.
Lovat-Fraser, J. A.
Tasker, Sir R. I.


Cross, R. H.
Lyons, A. M.
Tate, Mavis C.


Crossley, A. C.
MacAndrew, Colonel Sir C. G.
Thomas, J. P. L. (Hereford)


Crowder, J. F. E.
McCorquodale, M. S.
Titchfield, Marquess of


Culverwell, C. T.
MacDonald, Rt. Hn. J. R. (Scot. U.)
Train, Sir J.


Davidson, Rt. Hon. Sir J. C. C.
MacDonald, Rt. Hon. M. (Ross)
Tree, A. R. L. F.


Davies, C. (Montgomery)
Macdonald, Capt. P. (Isle of Wight)
Tryon, Major Rt. Hon. G. C.


Davies, Major G. F. (Yeovil)
McEwen, Capt. J. H. F.
Turned, Lieut.-Com. R. L.


Dawson, Sir P.
McKie, J. H.
Turton, R. H.


Denman, Hon. R. D.
Macmillan, H. (Stockton-on-Tees)
Wakefield, W. W.


Donner, P. W.
Manningham-Buller, Sir M.
Ward, Lieut.-Col. Sir A. L. (Hull)


Dorman-Smith, Major R. H.
Margesson, Capt. Rt. Hon. H. D. R.
Ward, Irene (Wadsend)


Dower, Capt. A. V. G.
Mayhew, Lt.-Col. J.
Warrender, Sir V.


Drewe, C.
Meller, Sir R. J. (Mitcham)
Waterhouse, Captain C.


Dugdale, Major T. L.
Mellor, Sir J. S. P. (Tamworth)
Wedderburn, H. J. S.


Duggan, H. J.
Mitchell, H. (Brentford and Chiswick)
Wells, S. R.


Duncan, J. A. L.
Mitcheson, Sir G. G.
Wickham, Lt.-Col. E. T. R.


Dunglass, Lord
Moore, Lieut.-Col. T. C. R.
Windsor-Clive, Lieut.-Colonel G.


Eales, J. F.
Moreing, A. C.
Withers, Sir J. J.


Eastwood, J. F.
Morgan, R. H.
Womersley, Sir W. J.


Eckersley, P. T.
Morrison, G. A. (Scottish Univ's.)



Edmondson, Major Sir J.
Morrison, W. S. (Cirencester)
TELLERS FOR THE NOES.—


Elliot, Rt. Hon. W. E.
Muirhead, Lt.-Col. A. J.
Dr. Morris Jones and Lieut.




Colonel Llewellin.


Question, "That the Clause stand part of the Bill," put, and agreed to.

Motion made, and Question proposed, "That this Schedule be the Schedule to the Bill."

7.36 p.m.

Mr. BENSON: There are one or two questions on the Schedule which I should like answered as to the reasons for the very extraordinary financial arrangements. On reading the Bill one realises it must have been drafted by a mathematician, and, moreover, by a mathematician who envied Lewis Carroll his authorship of "Through a Looking Glass," for everything seems to run contrary to all the normal practices. May I know whether the repayment of the £100,000, which is advanced by the Treasury to reserve, takes preference on winding up before arrears of interest on preference or ordinary shares I should also like to know why the interest on the preference shares is to be 3½ per cent., whereas the interest on the ordinary shares, which rank with them for repayment, is only to be 3 per cent.? I find in paragraph 6 (d) that the interest on the ordinary shares is to be equal to simple interest at 3 per cent., whereas there is no reference to simple interest with respect of the 3½ per cent. preference shares. Is there any reason why these words should appear in subparagraph (d) and not in sub-paragraph (c)? Assuming that the company is prosperous, that all our pessimistic expectations as to losses are not realised, and that the company builds up substantial reserves, what is to happen to those reserves if and when the company is wound up? Do the reserves go to the shareholders who have found the capital or do they go to the Treasury? I can find no reference whatever to any allocation of reserves.
I am glad that the Chancellor of the Exchequer is here, because I want to refer once again to the form of the guarantee given by the Treasury. If I understood the Chancellor of the Exchequer aright, on the first £1,000,000 the guarantee is 25 per cent. On the lending of the £1,000,000, assuming that it has all been repaid the second time, the guarantee again is 25 per cent., but thereafter every time the money is repaid and lent out again the guarantee aggregates until, having been lent out five times—the first time, and four times

re-lent—the guarantee becomes 100 per cent. What is the reason for increasing the guarantee? One would asume that, in view of the fact that this increasing guarantee cannot become operative for many years to attract capital and to obtain the necessary money—not the first money but possibly a considerable increase in capital—one would have required a larger guarantee at first rather than later on. Here again we find everything topsy-turvy. The greater guarantee comes later on when we see how the company is working, just as the lower rate of interest is on the ordinary shares and not the preference share. The whole thing is upside down and directly contrary to what on the Second Reading Debate the Financial Secretary called "good commercial practice." I should be glad of some explanation of why these extraordinary anomalies are to be found in the Bill.

7.41 p.m.

Mr. PETHERICK: I am sorry I had to be absent for about an hour during the course of these Debates, but on the Schedule I must again make a protest in regard to the Bill, which I do not like either from the point of view of its principle or from the point of view of the way it is drafted. What we appear to be doing in the Schedule is to think of a number, multiply it by a sum unknown, divide it by four, take away the excess over 1,000,000, and the result is what the taxpayer loses. We might well pause before we pass this Schedule.

7.42 p.m.

Mr. CHAMBERLAIN: The questions which have been addressed to me by the hon. Member are numerous, and I will answer them as far as I can, but if my memory fails me no doubt he will come to my assistance. The first question he asked was what was the priority upon the winding-up of the company, and whether it was actually the case that the Treasury would be repaid the £100,000 before arrears of dividend were made up to the share-holders. The answer to that is, "Yes." I do not know whether the hon. Member objects to that.

Mr. BENSON: It is very good of the right hon. Gentleman to give way, but it is not for me to object. The Chancellor of the Exchequer says that he has promised the money, and the only point


that strike's me is that there is not much use in the Treasury paying the £100,000 into reserve if there is not considerable priority in winding-up.

Mr. CHAMBERLAIN: That is on the assumption that there is going to be something left on the winding-up over arid above the losses, and there may be nothing of the kind. There may be nothing left at all, and therefore, in that case the Treasury contribution is very material. The hon. Member wanted to know why we paid only 3 per cent. for ordinary shares and 3½ per cent. for preference shares. My hon. Friend has already explained that we can get the money on those terms, and that really is a sufficient answer to the hon. Member, who cannot understand how he can get money on such favourable terms for an ordinary commercial concern or commercial venture. As I have tried to explain on several occasions, it is not an ordinary commercial concern, but we have found that there are people willing to accept the terms offered and find the money on those terms. That being so, I do not think that we should look that gift horse in the mouth.
The hon. Member also asked me a question about the difference of the position of the ordinary shareholders and the preference shareholders in regard to the winding up of the company. In the case of the preference shareholders their dividend is a fixed and cumulative dividend—3½ per cent. There can be no question of the preference shareholders getting any more than the 3½ per cent. In the case of the ordinary shareholders, the dividend is not fixed, but there is a provision to say that if there is money over sufficient to pay up arrears of dividend to the ordinary shareholders, they are not to be able to claim more than 3 per cent. in respect of each year. If they had compound interest they would be getting 3 per cent. in the first year, plus compound interest for any subsequent period. Under this provision they will be limited to 3 per cent. for each year in respect of any arrears they may hope to get when the company is wound up.
Finally, the hon. Member wanted to know to whom the surplus was to go, assuming there was a surplus sufficient after the various priorities had been met, namely, (1) the debt on the share capital of £1,000,000, (2) the £100,000 to the

Treasury, (3) the arrears of preference dividends, (4) the arrears of ordinary dividend and (5) the repayments to the Treasury of any sum claimed in respect of preliminary and winding-up expenses. If there is anything left after that, it will, of course, go to the shareholders. I think I have answered all the questions put to me by the hon. Member. I do not think that things are so topsy-turvy as he suggests. They are complicated and need a certain amount of explanation.

Preamble agreed to.

Bill reported, without Amendment; to be read the Third time To-morrow.

Orders of the Day — CIVIL LIST BILL.

Considered in Committee.

[Captain BOURNE in the Chair.]

Clauses 1 to 8 ordered to stand part of the Bill.

CLAUSE 9.—(Provision as to certain officers of the Household.)

Motion made, and Question proposed, "That the Clause stand part of the Bill."

7.50 p.m.

Mr. EDE: A short discussion took place on the subject raised in this Clause when the Bill was before the House the other night, and I should like to have a little more information with regard to the situation created by the proposed alteration. I gathered from the answer given to the hon. Member for Aylesbury (Mr. M. Beaumont) that this Clause made no difference in the position of the three officers concerned, except a change of the Vote on which their salaries were charged; but I think it goes a little further. These three officers, the Treasurer of the Household, the Comptroller of the Household and the Vice-Chamberlain of the Household have hitherto been officers of His Majesty's Household, and if the step proposed in Clause 9 had not been taken, their salaries would have been fixed by the Civil List Bill and questions relating to them could not have been raised again until a new Civil List was discussed, whereas the effect of transferring the salaries of these officers from the Civil List to the ordinary Estimates will be that their


salaries will come annually before the House, and anything relating to them can be discussed. If we dissent from anything they do or the way they discharge their duties, a motion to reduce their salaries can be moved on one of the days devoted to the Supply Estimates.
These three officers discharge certain duties. On occasion they come to us, gaily apparelled, in order to bring a Message from the Throne. Hitherto, I understand that their conduct or demeanour on such an occasion would be a subject for the Sovereign. to deal with and not for this House, but in future if we do not approve of the way they behave on these occasions, or if they are improperly dressed, it will be for us to raise the matter. I understand also that one of these officers performs an even more important duty. The Vice-Chamberlain of the Household performs the duty of sending daily a report of the proceedings of the House to the reigning Sovereign. When a friend of mine held that office, I got into serious trouble for trying to take him away from the Whips' Office one evening at a certain hour when he had not completed his letter to the Sovereign. He had to complete that duty before he could attend to anything else, pleasurable as the occasion was to which I had invited him.
Do the proposed changes mean that it will be possible for us to call for the production of that Message? This officer is now to be our officer, and not the officer of the Crown. Would it be possible for us if the Message were not produced when we wanted it, to move a reduction of that officer's salary when the appropriate occasion arose? I should have thought that when we were transferring these officers there would have been one other officer who would have been transferred, and that is the Lord Chamberlain. I cannot help thinking that it is regrettable that this opportunity of transferring the Lord Chamberlain from being an officer borne on the Civil List to an officer borne on the Estimates of the House, has not been taken. He discharges now, apparently as a sort of Court function, the duty of the censorship of plays, and he has certain duties in regard to the control of theatres, important matters with regard to the expression of opinion in this country, for which he is

not responsible to this House or to Parliament.

The DEPUTY-CHAIRMAN: I do not think I can allow the hon. Member to discuss at any length a subject which if he had moved an Amendment to that effect I should have ruled it out of order.

Mr. EDE: May I ask the Chancellor of the Exchequer or the Financial Secretary whether the question of transferring the Lord Chamberlain with the other three officers was considered, and, if so, for what reason was it decided not to include that officer in this Clause? I should have thought that it would have been a good thing while we were making the change to have made a clean sweep. I understand that one of the reasons for transferring these three officers to the Estimates is that their salaries may be dealt with and that they may be given the salary that is regarded as appropriate to a Government Whip. At the moment they are in the anomalous position that while they are supposed to be the principal assistants of the Patronage Secretary to the Treasury they are less well paid than those Whips who are Junior Lords of the Treasury, with salary. Anything that removes anomalies in the payment of Members on the Front Bench opposite is a matter worthy of consideration. The principal anomaly is that they sit there at all, but we have to endure that. While they do sit there, anomalies ought to be dealt with.

7.58 p.m.

Mr. CHAMBERLAIN: The position of the Lord Chamberlain is quite different from that of the three officers mentioned in the Clause. His is not an office which changes with the Government, but the officers mentioned in the Clause are Whips of the party in office. It, therefore, seems appropriate that their salaries should be borne upon the Estimates and not on the Civil List, thereby swelling the Civil List, seeing that their principal duties are in connection with this House. There is nothing changed by this Clause except that the salaries of these officers are being borne upon the Votes instead of the Civil List.

Clauses 10 to 12 ordered to stand part of the Bill.

CLAUSE 13.—(Continuance of enactments, commencement, repeal and short title.)

7.59 p.m.

Mr. ALAN HERBERT: I beg to move, in page 8, line 23, to leave out Subsection (1), and to insert:
(1) There shall be charged on the Consolidated Fund in each year of the present reign such sums as may be required for the payment of pensions already granted or hereafter to be granted to persons who by the performance of duties to the public, or by their useful discoveries in science and attainments in literature, the arts, or learning, have merited the gracious consideration of the Sovereign and the gratitude of their country; but the sums so charged for the grant Of new pensions shall not in any year exceed four thousand pounds. Subject to the provisions of this Sub-section Sections five and six of the Civil List Act, 1837, shall continue to apply.
It will be seen from the names of hon. Members who have been kind enough to put their names to the Amendment that this is a non-party affair. It is one of those small matters in which all sections of the House will be glad and proud to take a part. I hope that we may even move that immovable organ the bowels of the Treasury. When I mentioned this matter first I received a reply from the Chancellor of the Exchequer for which I thank him. It is not necessary, I hope, to justify what I may call the spiritual foundation of this proposal, in the British Parliament, the heart of the British race, which has spread its language, literature and learning throughout the civilised world and beyond. I should like to make one or two practical points in connection with the Amendment. The first point is that we should increase the annual sum available for Civil List pensions for persons who, in the words of the Amendment (which, with a few slight alterations, I have taken from the Act of 1837):
by the performance of duties to the public, or by their useful discoveries in science, and attainments in literature, the arts, op learning, have merited the gracious consideration of the Sovereign and the gratitude of their country.
At the moment the sum fixed by the Act of 1837 is £1,200 and this Amendment proposes that that sum shall be increased to £4,000. May I say at this stage that it is such a rare thing for a private Member to be able to propose the increase of a grant of public money recommended by the Ministers of

the Crown, and to be in order, that I hope the Committee will take advantage of it and press their rights to the fullest possible limit, especially as we find ourselves at the dinner-hour, when, as we know, anything may happen.
My practical points are these: The Chancellor of the Exchequer in his interesting speech in proposing the Financial Resolutions which are the foundation of the Bill mentioned that owing to the generosity of His Majesty and the sagacity of His Majesty's Government a saving of £36,000 or £37,000 was being made on the Civil List this year. I suggest that out of that saving some small sum at least might be devoted to the purposes mentioned in this Amendment. Secondly, when this sum of £1,200 was fixed in 1837 conditions were very different from those of to-day. To take an example, the Civil List of Her Majesty Queen Victoria was £385,000. To-day, very rightly and properly, the Civil List is £410,000 and in the last reign it was £470,000. But the figure of £1,200 for artists and others remains the same. Other figures have altered. In 1837 the population was, I think, about 15,000,000; to-day it is about 40,000,000. The revenue then was not £80,000,000; to-day it is something like £800,000,000. In those days these, I suppose, were the only Government pensions granted. At the present time we rightly grant something like £40,000,000 in pensions, and the sum I suggest—£4,000—is only one in 10,000 of that figure. Apart from that the struggle for existence in the artistic world was not, I think, so severe in 1837 as it is going to be next year, 100 years later, in 1937.
Having regard also to mechanical inventions which come about every year and which can in the twinkling of an eye sweep aside a livelihood, especially in the domain of music and painting, it will be seen that everything has changed since 1837, when this figure was fixed, except this figure. In fairness I should like to say, because I do not like to discredit my country unnecessarily, that things are not quite as bad as they appear. The figure of £1,200 is not, as some people think, the total figure distributed in pensions every year. The Chancellor of the Exchequer, I think, will tell you that the


total figure distributed every year is more in the neighbourhood of £20,000. This £1,200 represents what is given in new pensions every year. Well, £20,000 is not a figure which staggers me when it is devoted to this purpose, and especially when it is compared with the total figure of £40,000,000 paid in pensions otherwise.
I suggest that no civilised country having once accepted, as we have accepted, the principle of distributing pensions of this kind, would be satisfied that it was doing its duty and serving that principle sufficiently by distributing only £1,200 in new pensions every year—a sum which comes down to £60, £80, never I think more than £100, in individual cases. For the satisfaction and the reassurance of hon. Members who rightly fear reckless distribution of public money, who perhaps are not satisfied with all modern manifestations of the arts, and who may think of casual benefactions for crooners and composers of foxtrots and so on, I would say that there are after all statutory qualifications for these pensions. There must be merit, there must be service and duty.
I am not suggesting that everyone who dabbles in the arts and fails through laziness or any other cause should be benefited by the State in this way. I think it is the Prime Minister who decides who shall receive these pensions, and that is a guarantee that they will be properly allocated. Nobody, I think, need fear that the money will be improperly disposed of. It may be said, of course, that in some years there will not be a sufficient number of applicants who are worthy to receive these pensions. I think it is very possible that may be true in some years, although I am bound to say I could almost make a bet that this year and in most years of my life I should be able to find sufficient people to lead to the Prime Minister and say, "Here are worthy people to receive these benefactions from the State."
If there is any difficulty of that sort the answer is that it is not necessary to spend this money every year. I think it very likely that the contemptible smallness of this figure has in many cases prevented people coming to the Crown and applying for pensions. Somebody may say that, after all, there are benevolent funds and charities in various branches

of the arts. So there are, but I do not think the State should evade obligations by referring to the existence of private charities. We must remember, too, that we are at the beginning of what we all hope will be a long reign, and whatever sum is fixed this evening will be fixed for the whole reign. I do not know what will happen before the end of the reign. The Chancellor of the Exchequer and his successors, pursuing the course of taxation so familiar to us all, may find the springs of charity, which are already running low, running dry. Then perhaps these pensions will be the only resource to which the recipients of them may turn.
I hope that no Member of the Committee will think that, because of my connection with what I hope I may call an art, I am thinking only of literature or writing and journalism. Indeed I am thinking more of music and painting, as I think the people engaged in those arts are people who at present need consideration even more than those in other forms of art. And apart from art there is science and research. Imagine a man like Professor J. B. S. Haldane—not that I suggest he is in any need of a pension or ever likely to be—but imagine a man like that, surrounded by his devoted assistants, continuously exposing himself to all sorts of perilous experiments, shutting himself up in, glass cases, consuming poisons, exposing himself to extraordinary dangers to discover cures of diseases, imagine a man like that who goes too far in that kind of experiment and finally finds himself unable to pursue that kind of work. What a terrible thing it would be that that man should not be able to go to the head of the State and say, "Sir I have done this for my country, give me a few pounds with which to end my days."
I do not think I can add anything more, except to say that it is an old-established habit in this country to neglect if not to despise the artist until he is rich and successful, until he is fashionable. Then we cannot say or do too much for him. That was never a good habit. I am not pleading for those who are successful. I am pleading for those who have laboured faithfully and well in the field of thought, in the field of research, in, the field of creative art, who find at the end of it all that they have gathered nothing for themselves except perhaps the memory of a short-lived fame. It is on behalf of


those people that I ask the compassion of this House and of the Chancellor of the Exchequer.

Mr. LOGAN: May I ask whether this will include legitimate drama?

Mr. HERBERT: Yes.

3.12 p.m.

Miss WILKINSON: I would like very briefly to support this Amendment, which is one that must appeal to Members of all parties. I should like first of all to congratulate our official humorist in this House on being the only private Member who has ever been able to get round the most rigid rule of the Treasury—so rigid that no one ever believed it possible to move anything that would in any way impose a charge on public funds and free us from the iron grip of the Treasury. I feel sure that the Chancellor of the Exchequer will by sympathetic to this Amendment. Britain does so little officially for artists, scientists, men of letters and those who labour in the realm of the mind. After all, artists and scientists are not often good business people. It often happens that authors of books that have been successful, or of songs that have been sung round the world, or composers of music which has enriched the heritage of the nation, have found that the profits made were made by the publishers. I have in mind a very great novel for which the authoress received exactly £50.
It is a fact, I think, that in history we largely remember countries because of great names in science and literature. I do not think this country, particularly in this age when we are spending so much on arms, should be remembered by its poor treatment of artists. I am sure the Chancellor of the Exchequer would like to have the opportunity of paying something more than the petty sums that have been mentioned. Almost every general in the last War received in one year more than has been paid to some of the greatest of our scientists who gave their life and strength to preserving life, and who at the end were left with so little. I need only mention Sir Ronald Ross, who did such great work in the investigation of malaria and tropical diseases and ended his life in pain and suffering because of the work he had done. Yet very little was done for him until the very end.
It seems strange that pensions given to those who destroy life should be more than pensions given to those who help to save life. I do not want to make these cheap distinctions, but I think the scales are weighted perhaps a little too much on the side of convention. No doubt hon. Members know of people who have given great service in literature and art to this nation who may not be really in need of this pension to keep a roof over their heads, which is practically all that a Civil List pension does, but to whom it would be of assistance. It may be said, and said truly, that the miner who risks his life gets no civil pension and only 10s. a week. I represent a mining constituency and I know that the worker in the mine, whose life and labour has been portrayed by novelists and poets, would be the last person in the world to think that their small pensions should not be augmented in this way. I appeal to hon. Members behind me to support this modest Amendment, which is designed to help some small deserving cases.

8.17 p.m.

Mr. PETHICK-LAWRENCE: May I add one word on behalf of my colleagues on the Select Committee? It would be desirable if the Chancellor of the Exchequer could see his way to meet the suggestion. The original amount of £1,200 was fixed when the finances of the country were in a totally different position from that of the present time. Those who have given their lives to literature and art of various kinds demand some recognition from the State. What is being done at the present time is exceedingly small for a country as rich as ours. We have supported the Chancellor of the Exchequer in the proposals which form the subject of the Civil List, and we hope that he will recognise the feeling there is in the House and throughout the country and will find it possible to accept the Amendment.

8.18 p.m.

Mr. CHAMBERLAIN: The proposal has been put before the Committee in very persuasive terms by the hon. Member for Oxford University (Mr. Herbert) and the hon. Lady, and the subject of it appeals to anybody who reflects on the sort of considerations which have been adduced by the two hon. Members, but I am afraid that I must ask the Committee to reject it, and I will explain


why. The hon. Member for Edinburgh, East (Mr. Pethick-Lawrence) knows that although they are called Civil List pensions they are not on the Civil List, and when he says that there is a great deal of feeling in the House and in the country I must say that there has been no evidence of it. It was reserved to the hon. Member for Oxford University to discover this point. He was the only one who raised it on the Financial Resolution, and he got not one single hon. Member to support him. Apparently, he was then under the impression that £1,200 was the total amount of pensions paid out in any single year, but he has learned since then that £1,200 is the annual amount which is available for new pensions in any particular year. In fact, the total amount which is now being paid out in these pensions is somewhere about £23,000 a year.
It is alleged that there is a demand for these pensions which ought to be satisfied, and which presumably would be satisfied if the Amendment was carried. I am not prepared to say that you could not find a number of deserving cases of persons to whom pensions of this kind might be awarded if the amount available was increased, but I do say that there have been increasing difficulties in recent years in discovering a sufficient number of persons who can meet the conditions of need and merit, and, therefore, if the amount was increased and was utilised you would have to relax the tests which have been applied for selecting recipients for these pensions.

Miss WILKINSON: Has not the difficulty rather been that the tests have been made very stringent and extremely conventional because the actual amount is so small?

Mr. CHAMBERLAIN: I will not enter into an argument on the point because I have not made any search into the particular conditions which are attached to each case, but I can give the Committee the information I have, and which still remains unaffected by what the hon. Lady has said. I said that you would have to expand your field, you would have to relax the conditions. It may be said that it is time they were relaxed, but that does not affect my argument. If you are to find suitable recipients for this in-

creased amount you would have to relax the conditions which have hitherto been imposed. That may be a good thing. But in that case how do you know that £4,000 is the right amount to fix? On what is the figure based? It is purely arbitrary. On the Financial Resolution the hon. Member for Oxford University took the simpler course of doubling the existing amount, and said that we ought to pay £2,400 instead of £1,200. Now, he has put it up to £4,000. Why? Why not £5,000? Why not £40,000? The hon. Member says that he is not staggered by £20,000. Why does he stop at £4,000? The figure of £1,200 a year given in new pensions has already meant a figure of £23,000; and if you put it at £4,000 it is quite probable that the total would run into £50,000 more than it is now.

Mr. HERBERT: I will tell the right hon. Gentleman why I put the figure at £4,000, which I am prepared to justify at any time. I thought the right hon. Gentleman would have the decency to meet me half way, and if he halves the £4,000 he will find that is just about the figure I mentioned.

Mr. CHAMBERLAIN: I shall not argue with the hon. Member about the term which he applied in this case, for he is still comparatively new to the House, and does not seem to realise the control which on these occasions is exercised regarding the things which are said on one side or on the other. My argument is quite a serious one. The figure which the hon. Member mentioned is purely arbitrary, and I feel certain that all the arguments which have been used by the hon. Member and by the hon. Lady opposite could be applied with equal force if the total amount were raised to £4,000. It would still be possible to find many more people deserving of assistance. Although it is perfectly true that the figure was fixed a long time ago, when the finances of the country, as the hon. Member opposite said, were in a very different position from what they are now, I would remind the Committee that at that period taxation was infinitely lower than it is now.
Although I am not prepared to say that it is not possible to make out a good case for increasing this sum, I put it to the Committee that at is extremely hard to state in a convincing way that any


particular sum is the right one to apply, and that, moreover, this would be an extremely difficult time at which to increase the sum, in view of the fact that at the moment we are putting fresh taxation on an already highly-taxed people. There would have to be a much better documentary demand for these particular pensions than it has been possible to produce at the present time, if an additional sum was to be justified. I am certain that the acceptance of the hon. Member's Amendment would merely mean that there would be a fresh demand for further pensions, and that there would be fresh grievances cropping up from people who would not be as well treated as these people would be. So far as I know there has been no agitation during, say, the last ten years, to the effect that the sum devoted to this purpose is not sufficient. I very much doubt whether there is a better reason in this case for this particular increase in the sums that are disposed of by the Treasury than there is in dozens of other cases in support of which I am sure the hon. Lady would be very eloquent if she could think of them at the moment. I must ask the Committee to reject the Amendment.

8.28 p.m.

Mr. MABANE: I am sure the Committee has listened carefully to the Chancellor's very weighty arguments and that it appreciates how difficult it is for him to find money in view of the additional taxation which is now being placed on people. I would, however, appeal to the Chancellor to consider whether he cannot, between now and the Report stage, go into this matter again with a view to discovering whether it might not be possible to make some small increase in this amount. It does not seem to me that it would be necessary to have any relaxation of the conditions in which the pensions are granted. If the amount available were increased it does not in the least follow that it would all be used in the year. I urge upon the Chancellor that, although there may have been no popular agitation, there is considerable feeling in the Committee that it would be a generous gesture if some small concession were made. I am sure the Committee would be pleased if the Chancellor could give some assurance that between now and the Report stage further consideration will be given to this very small matter.

8.29 p.m.

Mr. HERBERT: I may be only a new Member, but I am quite sure that if I were convinced that I had trespassed against any Rules of Order or even the etiquette of this place, I should be the first to apologise. I am, however, bound to say that I have not heard anything which persuades me that the expression I used just now was not justified. The word "decent" means "becoming," and I am surprised that the Chancellor of the Exchequer of this great country, the heart of the British Empire, should think it decent—that is, becoming and seemly—to stand up and speak in the cold and callous way he has about this very small help for which I have asked for a very large and important body of the community. The right hon. Gentleman asked me why I first asked him to double the sum. In my first speech I spoke extempore and suddenly, and that thought came to my mind. When I looked into the matter I saw that it was not nearly sufficient, and I mentioned the sum of £4,000 because I thought he would look into the matter in the manner in which most Chancellors of the Exchequer do, and say, "I cannot go as far as this gentleman suggests, but I will meet him half way and make some small concession." I am surprised that he is not ashamed not even to go as far as that. If he is offended by that I am very sorry, but I am quite prepared to say it again.
The right hon. Gentleman used the most extraordinary argument that I have ever heard, when he said that even if the sum were £4,000, £5,000 or £50,000 it would still be an arbitrary and imperfect figure. Good Heavens, what are the other figures in this Bill? Is not every limit fixed in a Bill arbitrary, and could not the same argument be made against it? I am surprised that the right hon. Gentleman the Chancellor of the Exchequer, with his great intellectual powers, should venture to offer such an argument as that. As for this matter of there being no evidence whatever to show that there is a real demand for these pensions, and the statement that if the sum were increased it would be impossible to use it, I would like to ask the right hon. Gentleman on what evidence he bases that argument As I said in my remarks just now, I would guarantee myself, if the sum were increased to the amount I suggest, to lead


by the hand worthy people who come within the limits of the present conditions and present them to the Prime Minister, and to say, "These are men and women who have done good service to this country in these departments of national life and they deserve to have this assistance now in the declining years of their lives." I may be ruled out of Order and forfeit the respect of right hon. Gentlemen on the Front Bench, but it is disgusting the way in which this modest little suggestion has been received—disgusting, I will say it again.
I have not come here from a manufacturer's office or from the rich parts of this world. I have grown up in the departments of life for which I am now pleading. It is all very well to say "Say it in Punch," but this is not a joke. The life of the artist may be glorious while it lasts, but it is short-lived, precarious and insecure, as are the lives of those for whom hon. Members opposite speak. The artist is not like a man with a factory, a man who builds up an office or a business, or owns land, who can go away and leave it to fructify. The artist is his own factory, his own office, his own raw material, his own foreman, his own manual labourer, and there is no allowance for wear and tear of machinery and plant. It is all in his head. If something happens, if there is a change of fashion, a new mechanical invention, illness in the family or something else, all is finished. The last hope of many who have carried across this country and across the world the name and fame of England in the arts, in literature, in science and so on, is this small pension which, as I say, is insufficient now, and ought to be increased.
I am bound to say that I am very disappointed and entirely unconvinced by the right hon. Gentleman's remarks, and I propose to press this to a Division. I hope I shall be supported by many sections of the House. Let us private Members get together, for this is one of the rare occasions upon which we are able to put down an Amendment increasing a grant of public money proposed by Ministers of the Crown. They have produced very few reasons why that increase should not be made. I hope we shall all stick together and press the Amendment to a Division.

Mr. ELLIS SMITH: Do that with poor people's pensions too.

8.35 p.m.

Mr. MacLAREN: I want to appeal to the Chancellor of the Exchequer, and I am sure that my success in the appeal will be all the more hopeful after the courageous speech that has just been addressed to the right hon. Gentleman by the hon. Member for Oxford University (Mr. Alan Herbert). Some of the arguments used by the Chancellor are a little difficult to accept. For instance, if the argument is to be used that taxation is becoming onerous to the point of making us super-economical in the administration of the State, if that is the argument that is to be used now, it does not convince very much when one recollects the vast amount of the subsidies that have gone out in other directions. After all, £40,000,000 odd went to beet sugar and other things that one could mention. We are not saying to-night whether or not these things were worthy objects on which to spend these vast fortunes, but I think the Chancellor, in his heart of hearts, must admit what has already been stated by my hon. Friend and colleagues. Some of the most worthy citizens of the State have not been great social successes, and, indeed, in a life like ours, when men attempt to do something of a scholastic, or of a philosophic, or indeed of a scientific nature, when they are scholars and keep aloof, because of the calling of their vocation, from the mere purpose of making money in this life, what do we find? They give out, their raw material passes, and they find themselves claimants on the State for charity.
If we had a country that really appreciated the finer things of life, we should not be making this appeal to-night. If there is anything that has impressed me with regard to the developments in Russia, it has been on this very point, that the Russian Government have indeed developed a distinct regard for the scholars and the students who have advanced Russian culture in that country. All that I can do tonight is to join in this appeal. I do not believe for a moment that if the Chancellor were left free, he would, of his own wish, turn down this appeal which we are making. He knows that there are a great many other people in this country who to-night


are nothing more than paupers, but who have rendered great service to the State in the past, and it is wholly unworthy of the intellect of this country that these people should be suffering as they are to-night. If there is a possibility of something being extended to them, at least to keep them away from this awful anxiety and constant dread of being without a house over their heads, we should not let the opportunity go by.
I can assure the Chancellor that I could give him the names and addresses of people to-night who are worse off than men on the dole. Here is the awful tragedy of it, that these people have to keep up outward appearances and to make things look bright outside, but we know their inner lives and the suffering they undergo. If we have any regard for the intellectual accomplishments of those who have contributed so much to the State, they should not be allowed to pass the end of their days in this way. I wish the Chancellor of the Exchequer would give me as much sympathy in this appeal as I had for him on Thursday last, when he was making his speech on this Bill. It may be that he is barred within the compass of the Bill—I do not know; it may be that it is a political indiscretion even to raise the matter on this occasion, but it is the only opportunity that we have of making this appeal, and if, as has already been said, it is possible on the Report stage for something to be done, may I appeal to him at least to consider it?
I am not saying very hard things about him or about his functioning as Chancellor of the Exchequer, because I believe that there are influences at work which check the free action even of a Chancellor, but I appeal to the right hon. Gentleman to-night to reconsider the appeal which we are making, in the hope that something will be done and that it shall not be said that an earnest appeal was made in this House on behalf of these men and women and that it was callously turned aside. It is not so much charity as the redemption of a debt which intellectual people or intelligent people owe to these men and women who are suffering from poverty because they have devoted themselves to their calling, but who might have been living comfortably if instead, they had converged all their energies and abilities upon money-making.

8.42 p.m.

Mr. HERBERT: On a point of Order. May I ask for your Ruling, Sir Dennis, in view of the suggestion made by the hon. Member for Huddersfield (Mr. Mabane) and the hon. Member for Burslem (Mr. MacLaren) that the Chancellor of the Exchequer might be induced to reconsider his opinion and to do something on the Report stage? I want to know whether I am not right in supposing that we cannot, on the Report stage of a Bill, increase or vary a charge on the Exchequer, in which case it would be impossible for the Chancellor of the Exchequer to do what he has been requested to do, so that a decision on the figure should be made now.

The CHAIRMAN: What the hon. Member says is perfectly true.

8.43 p.m.

Sir EDWARD CAMPBELL: I think it is necessary to bring the Committee to realise that the appeal was not, as was stated just now, carelessly turned down by the Chancellor of the Exchequer. The Chancellor, when he brings out his Budget, has had very great expert advice and experience, and on that he brings out his Budget. If there is any carelessness, I do not think it is so much on the part of my right hon. Friend as possibly on the part of my hon. Friend the Member for Oxford University (Mr. Alan Herbert), who suggested the sum of £4,000. He may be more or less correct in that sum, but he may equally be entirely wrong in his calculation. I remember very well that on the London County Council we had an education bill for something like £1,000,000, and the Opposition moved an Amendment suggesting that that sum should be doubled. The Chairman of the Education Committee pointed out that the sum for which he was asking was the result of calculations as to how much he required for teachers, for schools, for books, and the whole bag of tricks necessary for the education department; and when the Opposition proposed that that sum should be doubled, they were asked on what basis they made their calculation, and they said exactly the same as my hon. Friend has said—"If I had the money, I could spend it."
I am sure that all of us have very good cases which we could put before the Chancellor of the Exchequer, either for


such people as are mentioned here, or for others. I myself would put forward a claim for a little bit more for playing fields and various other things. I am not in the slightest blaming my hon. Friend, who, I have no doubt, is perfectly genuine in his ambition to try to help these people. I am pointing out, however, as a business man, that the Budget is a business statement. It is made up on, business lines, and if anybody moves an Amendment to increase the charges he should be able to say, "I know of 10 people"—

Mr. HERBERT: I have said so.

Sir E. CAMPBELL: The hon. Member has also said that he could bring as many more as the Chancellor wished. I have no doubt that he could, but does he know that there is a sufficient number to be able to receive this extra £4,000. The hon. Lady the Member for Jarrow (Miss Wilkinson) has said that artists are not business men. I am a business man, and I would never come to the Chancellor of the Exchequer and ask for any money unless I could tell him what it is to be spent upon.

Mr. T. J0HNST0N: The hon. Member would not come under this Amendment, for it only applies to people who have made useful discoveries in science and attainments in literature and the arts.

Sir E. CAMPBELL: I would not claim in any event. I am a very modest Scotsman. The right hon. Member is a Scotsman, but not so modest. I think that we might reasonably ask the hon. Member for Oxford University (Mr. Herbert) not to press the Amendment until another year, when he will have gone into the matter more thoroughly and be able to place a specific figure before the Chancellor.

8.48 p.m.

Mr. ADAMSON: I wish to disillusion those who may be under any misunderstanding that those who sit on this side of the Committee are supporting the Amendment. The majority of those whom we represent have to contribute towards the pensionable rights which they get at the age of 65. It may, perhaps, be justifiable for a Member representing a University to move such an Amendment as this on behalf of those who have had the advantages of a university education.

While we on this side may also have a regard for artistic and literary matters and for those who give the results of their genius to the world, we could suggest other methods to enable them to get their deserts at the end of a long life. I have some recollection of participating in what was termed a reform of the Copyright Law. Other instances in the arts could be quoted in which the artists should not sub-let their copyrights to other organisations that take advantage of them, but should organise in. their own self-defence.

Mr. HERBERT: On a point of Order. May I point out that the principle of this Amendment—

The CHAIRMAN: I would warn the hon. Member that there is very great objection to an hon. Member attempting to rise to a point of Order in order merely to make a point in the Debate.

Mr. HERBERT: I beg your pardon, Sir Dennis.

Mr. ADAMSON: If artistic and literary men and women could bring about a scheme of their own by setting aside a percentage of their copyright fees to a fund it would overcome many of their difficulties. It would be akin, perhaps, to the levy on coal, for artists and writers are producing something, and a levy on their productions could be used for a fund to help them at the end of their lives. Many of us on this side do not want to appeal to the Chancellor to soften his heart, but would rather support him in his opposition to handing out public money ad lib., as is suggested in this Amendment.

8.52 p.m.

Sir FRANK SANDERSON: I was very impressed by the case put forward by the Chancellor of the Exchequer in defence of the conclusion at which he has arrived. That case was that, if an increased amount were granted, it would be necessary to alter the conditions under which these grants are made. It must be obvious that, once that door were open, no one would know the extent to which the Chancellor would find himself committed. During the years I have had the honour of being a Member of Parliament, I have had two cases presented to me; both received consideration and they are enjoying the benefit of pensions to-day. That experience causes me to


arrive at the conclusion that when a case is made which complies with the conditions laid down, there are adequate funds available to meet the pension. Indeed, the Chancellor has said that sometimes they have difficulty in finding the men and women who are eligible for these pensions. Those who are in favour of the amount being increased should at least come to the House and be prepared to give facts and figures about cases of people for whom it is not possible to grant pensions.

8.54 p.m.

Mr. SILVERMAN: I listened with some regret to the speech made by one of my colleagues on the benches above the Gangway. My only interest in politics has been the defence of those who render great services to the State throughout their lives for very poor rewards, if any reward at all, and who, at the end of their lives, receive nothing for all their years of service. I do not yield to my hon. Friend in my sympathy or advocacy of such cases, but I think it would be a wrong sense of proportion which allowed us to be preoccupied with these things—though rightly occupied—to such an extent as to blind us to the need of other persons whose claims upon the State, if not greater, are at any rate not less. One of the stock arguments used by those who are opposed to the political creed of my hon. Friends and myself has been, "What would you do under Socialism for the arts? How would you deal with individual enterprise in music and painting? You cannot nationalise that, or collectivise that, or Socialise that." The Chancellor to-day gave us the converse of that argument. He is saying that the only individual enterprise which the society he defends is right in rewarding is the enterprise of those who act not primarily for any social or national benefit but merely to feather their own nests. Those persons in whom individual enterprise is the very life blood of their work, and whose life work is of more social than private importance, are the very exponents of private enterprise whose claims the Chancellor is not prepared to consider at all.
Notice was taken of the reply made by Russia to that kind of argument, but it is not only Russia that is concerned, because I think I am right in saying that this is the only country in Europe

which makes no contribution whatever towards individual artists in their years of struggle. In most European countries the State is only too ready to lend them a helping hand in their early, struggling days, when the public ear has not yet been won, if some Ministry of Fine Arts or some other Ministry can he convinced that to lend a helping hand would be of national benefit. The hon. Member for Oxford University is not asking the Chancellor to go so far as that. He is content to allow artists to make their own way and win the public ear for themselves, but is saying that when they have done it and when, for some reason not within their own control, their livelihood has gone, that then, within the narrow and rigorous limits of the present regulations, they should be able to make their claim on the State for services rendered to the State—not for high rewards, not for anything munificent, but merely for something to enable them to pass their remaining days in something other than absolute penury.
If anything is said about the number of the claimants I should be content to take the hon. Member for Oxford University (Mr. Herbert) at his word when he said that he could bring forward cases; but apart altogether from the number of cases there is the question of the amount of the pension. We have been told that in no circumstances is the pension above £100 and it may be as low as £40. Even if we limited the number of applicants one could see a case for increasing the amount of the pensions. The sum which has been asked for may be arbitrary, but when was this Committee ever asked to persist in an underpayment because any attempt to fix a higher payment was arbitrary? That is hardly an argument which does justice either to the intelligence of the right hon. Gentleman or to the opinion which he has of the intelligence of the Committee. I think this is a claim which both inside and outside this House must command very general sympathy, a claim the justice of which must be conceded in principle. The cost to the Treasury would be so very small that the Chancellor might consider it favourably at a time when he is asking the House to spend enormous sums of money on destructive purposes.

Mr. HERBERT: I wish to apologise to you, Sir Dennis, if I put forward a point


of Order in an improper manner, and I must apologise also to the hon. Member who was speaking at the time, but I wanted to point out that I felt the remarks he was making were not really relevant to the principle which we have accepted. I have done my best to give what facts and figures there are in support of my Amendment, and I do not know what more I can do. To mention prominent people by name might be very embarrassing.

Sir F. SANDERSON: Do I understand that the hon. Member put forward a case?

Mr. HERBERT: I put my case before, I think, the hon. Member came into the House. I should like to say to hon. Members opposite that I thank them for their support, and say also that I was surprised to hear from them a single voice against my proposal. In this matter we are all together. They plead for those who are, as they always say, the producers of wealth, and in this case I am pleading

for the producers of enlightenment, laughter and happiness, and therefore I am not surprised that we should be together. I do not ask the right hon. Gentlemen to think once more before he rejects this Amendment altogether. Whether it succeeds or not, if I have support in the Committee I shall press it to a Division, because I regard it as a matter of fundamental importance. As an hon. Member has said so well, the attitude of the State to art and science in this country is a disgrace to the country. This is only a small matter that I have raised, but it is as a footnote to the whole issue, and I wished to bring it forward publicly and prominently, although I should be the last person to suggest that there should be the last person to suggest that there should be any obstruction or delay to this Bill.

Question put, "That the words proposed to be left out stand part of the Clause."

The Committee divided: Ayes, 185; Noes, 110.

Division No. 175.]
AYES.
[9.4 p.m.


Acland-Troyte, Lt.-Col. G. J.
Dawson, Sir P.
Lamb, Sir J. Q.


Adams, S. V. T. (Leeds, W.)
De Chair, S. S.
Leckie, J. A.


Agnew, Lieut.-Comdr. P. G.
Denman, Hon. R. D.
Leech, Dr. J. W.


Albery, I. J.
Gorman-Smith, Major R. H.
Lees-Jones, J.


Allen, Lt.-Col. J. Sandeman (B'kn'hd)
Dower, Capt. A. V. G.
Lennox-Boyd, A. T. L.


Anstruther-Gray, W. J.
Dugdale, Major T. L.
Levy, T.


Aske, Sir R. W.
Duncan, J. A. L.
Lewis, O.


Assheton, R.
Dunglass, Lord
Liddall, W. S.


Atholl, Duchess of
Eales, J. F.
Llewellin, Lieut.-Col. J.


Baldwin-Webb, Col. J.
Eckersley, P. T.
Lloyd, G. W.


Balfour, Capt. H. H.(Isle of Thanet)
Edmondson, Major Sir J.
Lovat-Fraser, J. A.


Balniel, Lord
Ellis, Sir G.
Lyons, A. M.


Beaumont, Hon. R. E. B. (Portsm'h)
Elliston, G. S.
MacAndrew, Colonel Sir C. G.


Beit, Sir A. L.
Emmott, C. E. G. C.
Maclay, Hon. J. P.


Bird, Sir R. B.
Erskine Hill, A. G.
Macnamara, Capt. J. R. J.


Blair, sir R.
Evans, Capt. A. (Cardiff, S.)
Manningham-Buller, Sir M.


Blindell, Sir J.
Everard, W. L.
Margesson, Capt. Rt. Hon. H. D. R.


Bossom, A. C.
Fleming, E. L.
Markham, S. F.


Boulton, W. W.
Fremantle, Sir F. E.
Mayhew, Lt.-Col. J.


Bower, Comdr, R. T.
Fyfe, D. P. M.
Meller, Sir R. J. (Mitcham)


Bowyer, Capt. Sir G. E. W.
Ganzoni, Sir J.
Mellor, Sir J. S. P. (Tamworth)


Brass, Sir W.
Gluckstein, L. H.
Moore, Lieut.-Col. T. C. R.


Briscoe, Capt. R. G.
Goldle, N. B.
Moreing, A. C.


Brown, Rt. Hon. E. (Leith)
Goodman, Col. A. W.
Morgan, R. H.


Brown, Brig.-Gen. H. C. (Newbury)
Gower, Sir R. V.
Morris-Jones, Dr. J. H.


Browne, A. C. (Belfast, W.)
Graham, Captain A. C. (Wirral)
Morrison, W. S. (Cirencester)


Bull, B. B.
Grattan-Doyle, Sir N.
Muirhead, Lt.-Col. A. J.


Burgin, Dr. E. L.
Greene, W. P. C. (Worcester)
Neven-Spence, Maj. B. H. H.


Butler, R. A.
Gridley, Sir A. B.
O'Connor, Sir Terence J.


Campbell, Sir E. T.
Grimston, R. V.
O'Neill, Major Rt. Hon. Sir Hugh


Cartland, J. R. H.
Guinness, T. L. E. B.
Orr-Ewing, I. L.


Chamberlain, Rt. Hn. N. (Edgb't'n)
Gunston, Capt. D. W.
Palmer, G. E. H.


Channon, H.
Guy, J. C. M.
Peake, O.


Chapman, A. (Rutherglen)
Hannah, I. C.
Penny, Sir G.


Clarke, F. E.
Haslam, Sir J. (Bolton)
Perkins, W. R. D.


Clarry, Sir Reginald
Hellgers, Captain F. F. A.
Pilkington, R.


Clydesdale, Marquess of
Heneage, Lieut.-Colonel A. P.
Ponsonby, Col. C, E.


Cobb, Sir C. S.
Hepburn, P. G. T. Buchan-
Pownall, Sir Assheton


Colville, Lt.-Col. D. J.
Holmes, J. S.
Procter, Major H. A.


Cook, T. R. A. M. (Norfolk, N.)
Hope, Captain Hon. A. O. J.
Raikes, H. V. A. M.


Cooper, Rt. Hn. T. M. (E'nburgh,W.)
Hudson, Capt. A. U. M. (Hack., N.)
Ramsbotham, H.


Craven-Ellis, W.
Hume, Sir G. H.
Rathbone, J. R. (Bodmin)


Crookshank, Capt. H. F. C.
Hunter, T.
Rayner, Major R. H.


Croom-Johnson, R. P.
Jones, sir G. W. H. (S'k N'w'gt'n)
Reed, A. C. (Exeter)


Crowder, J. F. E.
Kerr, J. G. (Scottish Universities)
Reid, W. Allen (Derby)


Culverwell, C. T.
Kimball, L.
Remer, J. R.


Davies, Major G. F. (Yeovil)
Kirkpatrick, W. M.
Rickards, G. W. (Skipton)




Ropner, Colonel L.
Smith, Sir R. W. (Aberdeen)
Walker-Smith, Sir J.


Ross Taylor, W. (Woodbridge)
Smithers, Sir W.
Ward, Lieut.-Col. Sir A. L. (Hull)


Rowlands, G.
Somervell, Sir D. B. (Crewe)
Wardlaw-Milne, Sir J. S.


Ruggles-Brise, Colonel Sir E. A.
Somerville, A. A. (Windsor)
Warrender, Sir V.


Russell, A. West (Tynemouth)
Somerville, D. G. (Willesden, E.)
Wedderburn, H. I. S.


Salmon, Sir I.
Strauss, E. A. (Southwark, N.)
Wells, S. R.


Salt, E. W.
Strickland, Captain W. F.
Wickham, Lt.-Col. E. T H.


Samuel, M. R. A. (Putney)
Stuart, Hon. J. (Moray and Nairn)
Windsor-Clive, Lieut.-Colonel G.


Sanderson, Sir F. B.
Tasker, Sir R. I.
Womersley, Sir W. J.


Scott, Lord William
Taylor, C. S. (Eastbourne)
Wragg, H.


Selley, H. R.
Titchfield, Marquess of
Young, A. S. L. (Partick)


Shaw, Major P. S. (Wavertree)
Touche, G. C.



Shaw, Captain W. T. (Forfar)
Tree, A. R. L. F.
TELLERS FOR THE AYES.—


Shepperson, Sir E. W.
Tufnell, Lieut.-Com. R. L.
Commander Southby and Captain


Simon, Rt. Hon. Sir J. A.
Turton, R. H.
Waterhouse.


Smiles, Lieut.-Colonel Sir W. D.
Wakefield, W. W.





NOES.


Acland, Rt. Hon. Sir F. Dyke
Hall, G. H. (Aberdare)
Naylor, T. E.


Acland, R. T. D. (Barnstaple)
Hall, J. H. (Whitechapel)
Oliver, G. H.


Adams, D. M. (Poplar, S.)
Hardle, G. D.
Owen, Major G.


Alexander, Rt. Hon. A. V. (H'lsbr.)
Henderson, A. (Kingswinford)
Paling, W.


Amman, C. G.
Henderson, J. (Ardwick)
Parker, H. J. H.


Attlee, Rt. Hon. C. R.
Henderson, T. (Tradeston)
Pethick-Lawrence, F. W.


Banfield, J. W.
Holland, A.
Potts, J.


Barnes, A. J.
Hopkin, O.
Pritt, D. N.


Barr, J.
Jagger, J.
Richards, R. (Wrexham)


Batey, J.
Jenkins, A. (Pontypool)
Rltson, J.


Benson, G.
Jenkins, Sir W. (Neath)
Roberts, W. (Cumberland, N.)


Bevan, A.
John, W.
Rowson, G.


Broad, F. A.
Johnston, Rt. Hon. T.
Seely, Sir H. M.


Brown, Rt. Hon. J. (S. Ayrshire)
Jones, A. C. (Shipley)
Shinwell, E.


Burke, W. A.
Jones, H. Haydn (Merioneth)
Short, A.


Charleton, H. C.
Kelly, W. T.
Silkin, L.


Cluse, W. S.
Kennedy, Rt. Hon. T.
Silverman, S. S.


Cocks, F. S.
Lathan, G.
Simpson, F. B.


Compton, J.
Leach, W.
Smith, E. (Stoke)


Cove, W. G.
Lee, F.
Stewart, J. Henderson (Fife, E.)


Cripps, Hon. Sir Stafford
Leslie, J. R.
Strauss, G. R. (Lambeth, N.)


Daggar, G.
Logan, D. G.
Taylor, R. J. (Morpeth)


Dalton, H.
Lunn, W.
Thorne, W.


Davies, S. O. (Merthyr)
Macdonald, G. (Ince)
Thurtle, E.


Dunn, E. (Bother Valley)
Macdonald. Capt. P. (Isle of Wight)
Tinker, J. J.


Ede, J. C.
McEntee, V. La T.
Viant, S. P.


Edwards, Sir C. (Bedwellty)
McGhee, H. G.
Watkins, F. C.


Fletcher, Lt.-Comdr. R. T. H.
Maclean, N.
Watson, W. McL.


Foot, D. M.
MacNeill, Weir, L.
White, H. Graham


Gallacher, W.
Mainwaring, W. H.
Whiteley, W.


Gardner, B. W.
Mander, G. le M.
Williams, D. (Swansea, E.)


Garro-Jones, G. M.
Markfew, E.
Williams, E. J. (Ogmore)


George, Major G. Lloyd (Pembroke)
Marshall, F.
Wilson, C. H. (Attercliffe)


Gibbins, J.
Mathers, G.
Woods, G. S. (Finsbury)


Green. W. H. (Deptford)
Milner, Major J.



Greenwood, Rt. Hon. A.
Morrison, G. A. (Scottish Univ's.)
TELLERS FOR THE NOES.—


Griffith, F. Kingsley (M'ddl'sbro, W.)
Morrison, Rt. Hn. H. (Ha'kn'y, S.)
Mr. MacLaren and Mr. Alan Herbert.


Griffiths, G. A. (Hemsworth)
Muff, G.



Resolution agreed to.

Clause ordered to stand part of the Bill.

Schedule agreed to.

Preamble agreed to.

Bill reported, without Amendment; to be read the Third time To-morrow.

Orders of the Day — HOURS OF EMPLOYMENT (CONVENTIONS) BILL [Lords.]

Order for Second Reading read.

9.13 p.m.

The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): I beg to move, "That the Bill be now read a Second time."
Two conventions were adopted by the International Labour Conference at Geneva. The Government have announced their intention of ratifying them, subject to the necessary legislation being passed by Parliament. The first of them is with regard to the employment of women at night in industrial undertakings, and it revises a convention on the same subject passed at Washington in 1919. The new convention differs from the old in that it contains a specific exemption for women holding responsible positions of management who are not ordinarily engaged in manual work. Some countries were of opinion that the words in the old convention did not apply to women holding managerial posts, but in this country it was believed that the words did apply. When


the matter was taken to the International Court at the Hague, they decided that the view held in this country was correct, and that the convention, which was meant purely for the protection of manual workers, also applied to women holding managerial posts. Therefore, at the International Labour Conference at Geneva, this revision was proposed, and by Clauses 1 and 2 of the Bill it is now proposed to bring that revised convention into force.
The other Convention is one dealing with a technical matter of very limited application, namely, the system of shift working for persons employed in continuous operations in sheet glass works where so-called automatic machines are used. The Convention, which resulted from the discussions at Geneva, aims at providing a rest period for workers engaged in this industry, where the processes are continuous throughout the day and night and also throughout the weekend. The purpose of the Convention is to lay down provisions giving to these workers proper rest at the week-ends. There is only one firm concerned in this country, and as a matter of fact the Convention is in accordance with the present arrangements of that firm with regard to hours, and we understand that they support it. Of course the Convention, when it is adopted by other countries, will ensure that a similarly satisfactory system is followed in those countries. The Government of Northern Ireland are prepared, when these Conventions are ratified here, to apply them to Northern Ireland.

9.17 p.m.

Mr. SHORT: I think the House is indebted to the Under-Secretary for his very clear and concise statement. We on this side welcome the Measure. We have at times deplored the inactivity of British Governments in regard to the ratification of various Conventions. The International Labour Office has passed 49 Conventions, of which only 19 have been ratified by British Governments, and we particularly welcome the attitude of His Majesty's Government in regard to the ratification of these two Conventions. With regard to the first of them, while we shall jealously guard against any attempt at whittling away or undermining the protective legislation

with respect to the employment of women in industry, we think that the revision provided in the Bill is very necessary. It conforms with modern requirements, and no doubt meets the views of the countries associated with the administration of the Convention which was passed in 1919. To the Convention relating to sheet glass works we are also able to accord our support, but there is one point which I should like to make, and on which I hope we shall receive some assurance. In Sub-section (1) of Clause 3 it is provided that in certain circumstances a departure may be made from the statutory provisions regarding shift work and employment, and in Sub-section (3) it is provided that the additional hours worked, when there is such a departure, shall be paid for by way of compensation after agreement between the workers' representatives and the employers, or, failing that, as prescribed by the Secretary of State after consultation with the Minister of Labour. Provision is also made for the keeping of a record of the additional hours worked and the compensation paid, and I desire that, when the Secretary of State prescribes the form for this record, he should make arrangements for it to contain a record of the cause of the departure from the hours set out in the Bill. If the hon. Gentleman can give that assurance, we shall not only welcome the Bill but shall offer no opposition to it, either to-night or during its further stages.

9.20 p.m.

Mr. MANDER: We on these benches are very glad to support the Second Reading of this Measure and to congratulate the Government on an excellent piece of legislation. In this respect at any rate they are carrying out an obligation to the League of Nations. The conventions have been agreed to at Geneva, and, in passing the necessary municipal legislation for bringing them into force in this country we are setting a very good example. I think it is wise that we should have these conventions, because, as the standard of working conditions in this country is better than or at least as good as in other countries, anything that can be done to bring our competitors up to our standard will equalise matters for us and put us in a fairer and better position as regards international competition. The hon.


Member for Doncaster (Mr. Short) has referred to the number of conventions that are still unratified, and, while it would be out of order to pursue the matter on this Measure, I hope the Under-Secretary will take an early opportunity of indicating what it is proposed to do with all the unratified conventions, and when the necessary legislation for dealing with those which the Government have promised to ratify will be introduced.
There is nothing revolutionary in either of the conventions referred to in the present Bill. They are in a very minor key, but, so far as they go, they are good. They deal in a very piecemeal way with the great question of international industrial legislation. It is interesting to note that the first of them is rendered necessary by the interpretation of a Statute by the World Court. It is satisfactory to note the attention that is paid to the court. The matter is referred to the court, the decision of the court is accepted, and the various Governments in different parts of the world pass the necessary local legislation to put themselves in the right position as a result of that decision.
So far as this country is concerned, there is opposition to the Measure in one quarter alone. Certain women's organisations, representing by no means the whole of the women workers of the country, are opposed to it because they think it is wrong that a matter affecting night work should be dealt with on a sex basis. They contend that it should be dealt with according to the nature of the work, and that anyone of either sex, who cannot do the work, should be prohibited from doing it. For that reason they find themselves against the proposal, and from their point of view there is this to be said, that while, under the convention which has now been in operation for 10 years, notice of withdrawal can be given at any moment, when the present Measure is passed it will not be possible to give notice to withdraw for 10 years. Therefore, it makes their position considerably more difficult. I do not know whether the Under-Secretary would feel able to make some comment on the position taken up by these organisations. I do not pretend myself to be entirely in sympathy with their point of view, but they feel keenly

about the matter, and if my hon. Friend could say something it would be meeting a serious point of opposition in a reasonable way.

9.26 p.m.

Mr. KELLY: I am afraid that I do, not feel as happy about this Bill as the last speaker, and I am not going to use the argument that because this has come through Geneva, therefore we should be quite enthusiastic about it. Why this hurry on the part of the Government in order to help this particular industry in this way? Why is it that the people in a managerial position or a position of responsibility—I do not know whether that is to be defined sometime—are being dealt with in such a way that they will be entitled to work throughout the night and under conditions of four shifts a day, covering 24 hours of the day and seven days a week. Under this Measure these places will be operating for the whole of the hours, 168 hours a week, and women may be employed for a shift on each of these days, on a Sunday as well as on the other days of the week. I wonder why it is that the sheet glass trade—if it can be clearly defined, and if a line of demarcation can be drawn between it and other sections of the glass industry has been specially chosen for this purpose. Does it mean that this may be extended in the near future to other industries which may be continuing their operations by the use of automatic machines?
It is amazing that the main feature of this is that this industry has within recent years operated many automatic machines, and that they have a continuous process. Other industries have in recent years introduced and are operating to-day automatic machines, and are engaged on continuous processes. Does it mean that we are going to open up industry so that we shall have women engaged on these continuous processes working all the hours of the day and night? I see few safeguards in this Measure. While they say that the hours of the week shall be 42, the Bill speaks of a particular shift not exceeding eight hours. Again, provision is made that when the change-over comes from working in the morning one week to the afternoon or night shift in the next week, then there may be an increase of hours. It is an amazing thing that at this time of day those people who are advising the Government have not been


able to arrange that the change-over shall take place without there having to be an increase of the hours of work for those who are engaged in that change-over.
Article 3 makes reference to "in case of urgent work." There are some of us who have been employed in the engineering trade for many years and we know what the word "urgent" can mean. It covers anything which the employer cares to bring under its shelter, and I would like to know why this word is included in order that these few women might be engaged in the sheet-glass industry, coming as it does after the introduction of the two-shift system for women and young persons. It is an amazing feature that the early efforts of the Government are all in favour of worsening working conditions in industry and making is possible for women to work night hours in a way that is not to the advantage of this country if it operated in the case of men. Why in this particular industry, an industry about which you ought to think twice before engaging women in what is termed a position of responsibility, are you asking us to agree to this? It is not to the advantage of this country that we should engage in our work in this way.

9.32 p.m.

Mr. BANFIELD: May I say a word on this Bill arising entirely out of my own experience as a delegate to Geneva for two years running? I am pleased to welcome even a small Bill of this kind. I have always taken the view that when the International Labour Office decides on a convention and that convention is carried by the requisite two-thirds majority of the employers' representatives and the workmen's representatives, there is an obligation on the British Government to ratify it if it is at all possible. My complaint is that this kind of Bill, ratifying Geneva conventions, is not brought before this House in all cases, and, in point of fact, always in a minority of cases. The Under-Secretary says, "We have a nice little Bill here. The first part of it simply carries on the usual custom we have in this country. The second part lays down certain conditions for sheet glass manufacture, but as we have only so many in this country doing that kind of work and are already operating this policy, everything in the garden is lovely and we are not likely to

have any criticism of the proposal." But in the course of this Debate the question was brought up whether, dealing with the employment of women on night work, it is altogether wise to exempt any women. I cannot understand why, if it is not good for a certain woman to work at night doing a certain job, it can he very good for another woman employed in the same industry to be allowed to continue to work at night.
It has rather an important bearing on Geneva conventions generally. For instance, we had a convention carried at Geneva which was devised to abolish night-baking which the Government refused to ratify. There is included in this Bill an exemption which may be taken as a very serious precedent, because I am not without hope of seeing the nightbaking convention ratified. Sometimes perseverance is rewarded and, even if this Government will not ratify it, I hope that some Government some day will. When it comes to a question of continuous night working, I do not want a precedent created that some women may be exempt from its provisions. The hon. Member for East Wolverhampton (Mr. Mander) said it was very nice to hear the Under-Secretary say we had submitted this case to the International Court of Justice at the Hague, that they gave a certain decision and the Government have adopted it—because it happened to be the opinion of the British Government too. I also attended a meeting at the Hague and submitted an important point in relation to this kind of legislation as to whether legislation which applied to industrial workers might not also be applied to employers in the industry. On that occasion the Court said that in certain cases it might apply to employers and to families who were employers also. Article 3 of Part I of the Schedule to this Bill says:
Women without distinction of age shall not be employed through the night in any public or private industrial undertaking, or any branch thereof, other than an undertaking in which only members of the same family are employed.
That sounds very nice, but here again I should be sorry to see a precedent set up, because on the day that we ratify the abolition of night-baking it will be necessary that the members of a family engaged in baking shall also came under the law; otherwise we shall have the whole thing reduced to a farce. I want


to safeguard the future position so far as other ratifications of conventions are concerned. On the general principle of the ratification of Geneva conventions, we have some reasonable ground of complaint because we have ratified only 19, and this small one, of course, will account for another; but they are so narrow and limited that they do not interfere with our present customs. It is easy to pass legislation of this kind and for the Government to get credit for it by going to Geneva and saying, "We have ratified two conventions since we were here on the last occasion." Loud cheers from every one in the conference!
There is going to be among a certain section of women's organizations a demand that women should be allowed to do precisely the same work as men in any circumstances. They can argue that, on this question of forbidding women to be employed at night, the principle is all wrong. They will say there is no difference between a woman working all night and a man working all night, and they make it rather a sex question of men keeping women out of the industry. As one who knows something about nightwork, I declare of my own knowledge that we are very wise to forbid women engaging in continuous night work. I wish the House could see some of the men who are compelled to work six nights a week for 52 weeks in a year with no interval, no shift system and no change. They would see men of 50 years of age who are physical wrecks. If it was only that this Measure provides some small protection for women I should welcome it. I hope we are not going to embark, even, in a small Measure like this, on the principle of exemptions. The curse of the House of Commons is that it is so ready to compromise on everything in order to get the smooth passage of a Bill. I hope that the Bill will get its Second Reading, small as it is, and that we may endeavour to get some alterations which will protect our position that it must not necessarily be taken as a precedent for other industries.

9.42 p.m.

Mr. LLOYD: The actual position at present is that there is no general prohibition of nightwork for women. What there is a restriction upon the employment of women at night in certain occupations. Apart from that, there is no

general prohibition. Therefore, the Bill is not making an inroad on a generally accepted principle. I agree with the hon. Member's general outlook on the employment of women at night. With reference to his remarks on the views of the women's organisation that he mentioned, I understand that it appears to be moved by a really intellectual outlook upon this question—what one might describe as a theoretical outlook. Their idea is that there should be no restrictions whatever on the employment of women, and they wish to see all of the restrictions abolished. Therefore, while they are in, favour of the revision of this convention because it is in the direction of the abolition of restrictions, they are opposed to the convention as a whole because it lays down restrictions on the employment of women. I think the view of the House upon an attitude of that kind would be that we are not prepared to throw overboard all the principles upon which our legislation on this subject has been built up for many years simply at the instance of a theoretical and doctrinaire outlook.
No doubt if these ladies persist in their attitude and are able to attract a great measure of support in the country that their views are right, we may have to consider the matter. But at the moment I do not believe that we ought to be moved by this consideration. The hon. Member for Rochdale (Mr. Kelly) asked me one or two questions, and I think he was somewhat under a misapprehension in thinking that these two Conventions were related to each other. He referred to the position of managerial women in the glass industry, rather giving the impression that he felt that there was some relation between the two Conventions. There is not; they are entirely independent. There is no particular relevance of one convention to the subject matter of the other. He also asked me why all this hurry? These Conventions were passed at Geneva in 1934, and I do not think that there is undue hurry. He was the only hon. Member to conduct discussion to-night on a partisan basis, and I feel that his attack upon the Government falls to the ground, since I do not think that undue haste can really be alleged against the Government.

Mr. KELLY: As compared with other conventions.

Mr. LLOYD: As a matter of fact, this question was interrupted by the general election. Legislation had already been introduced in another place before the election, and it fell to the ground and had to be reintroduced in the new Parliament. I now come to deal with the very useful question addressed to me by the hon. Member for Doncaster (Mr. Short) of the provision under which there are certain relaxations of the code in regard to which forms of record should be kept. I think that I understand him aright when I say that his view is that, whereas he is ready to agree that, in certain circumstances, there must be a relaxation to meet practical conditions, yet he is very anxious to see that there should be no abuse, and that it should not be unduly easy. We entirely agree with him. We are able to meet him by referring him to Sub-section (3) of Clause 3 in which it is laid down that the Secretary of State has the power of prescribing the form, and to tell him that we are prepared to give special consideration to the importance of saying for the information of the inspectors, the precise circumstances in which advantage is taken of the proviso in question. I hope very much that that will meet the point of the hon. Gentleman, and that the House will give the Bill a Second Reading.

Bill committed to a Committee of the Whole House, for To-morrow.—[Commander Southby.]

Orders of the Day — PETROLEUM (TRANSFER OF LICENCES) BILL.

Order for Second Reading read.

9.49 p.m.

Mr. LLOYD: I beg to move, "That the Bill be now read a Second time."
I think I can say that this is an entirely uncontroversial Bill. It is designed to remedy a defect which has only recently become apparent in the machinery provided under the Petroleum (Consolidation) Act, 1928, in respect of licences for the keeping of petroleum spirit. The machinery of the Act worked quite well in so far as the granting of licences was concerned, but it became apparent very recently that there was in fact no power to transfer licences. The House, and

especially the legal Members of it, will see that that is not a position that can be allowed to continue. It follows that many transfers of licences already affected have no legal force, and also that, until the law is altered, all applications for such transfers will have to be met by the granting of a new licence, which is an unnecessary and, in some cases, an expensive procedure. The present Bill is confined solely to the regularisation of the transfer of licences both retrospectively and for the future. Hon. Gentlemen will appreciate that it may be that the keeper of a particular store in which petroleum is kept may transfer his business and licence to a different occupier. It is these circumstances for which it is sought to provide in this small Bill. There is no other purpose in the Bill; it is simply for remedying this defect which happened not to be discovered before.

Mr. SHORT: We on the Opposition benches regard this Bill as a very necessary adjustment of the law and do not offer any opposition to it.

Bill committed to a Committee of the Whole House, for To-morrow.—[Commander Southby.]

Orders of the Day — LAND REGISTRATION BILL.

Order for Second Reading read.

9.51 p.m.

The ATTORNEY-GENERAL (Sir Donald Somervell): I beg to move, "That the Bill be now read a Second time."
The Bill carries out, in effect, the recommendations of two Committees, one the Land Transfer Committee and the other the Dormant Fund Committee, which dealt with certain insurance funds of the Land Registry. I will first deal with the recommendation of the Land Registry Committee. It is rather complicated, but I will be as precise as I can in explaining the nature of the Bill to the House. Under the Land Registry Act, as most hon. Members will know, the registration of the title to land in London is compulsory, and voluntary throughout the rest of the country. Section 120 of the Act of 1925 provided that its provisions, although they might be extended at any time to a locality at


the request of a local authority, should not be extended by order of this House compulsorily to any area until after an interval of 10 years. Then it was provided that one Order could be made extending it to one county within a period of 11 years from the date of the Act. Actually Hastings and Eastbourne have adopted the compulsory system at their own request, and as the end of the 10 years approached the Land Registry Committee was appointed to consider whether there should be a compulsory extention to any, and, if so, what areas. The Committee were also asked to consider whether they recommended any Amendments of the machinery laid down in Section 122 of the Act. The Committee unanimously, without hesitation, recommended that there should be a compulsory extension to Middlesex.
That is the subject-matter of the Draft Order which appears on the Order Paper to-day, and which I shall move later, and it may be for the convenience of the House if I refer to it to that extent now. The fact is that in Middlesex already some two-thirds of the land is already registered under the voluntary provisions of the Land Registry Act, and it is on that and other grounds the most suitable county for the extension of the system. The Committee also recommend a small Amendment of the machinery, which will be found in Clause 1 of the Bill. Under the 1925 Act, it was provided that an Order such as that now before the House must be approved within 18 months of the time when the original notices were given. The repeal of that is proposed for this reason: Although things have gone very smoothly in the case of Middlesex, you might get a case where the making of maps and the whole of the inquiries took a considerable time, though it is hoped that it would not exceed 18 months. Under the Act of 1925, apart from the Amendment proposed, if the time occupied did exceed 18 months, you would have to start again.
Clause 2 deals with the Middlesex Deeds Registry. That Registry was set up originally in 1708 for the registration of deeds. It is not a system that has worked very well, and has been criticised from time to time. It will cease to be a Registry when the land registration system gets going, and Clause 2 is to provide for what is to happen to it once

the land registration system starts. It will continue to exist as a Registry of past deeds. There is a period of two years during which deeds already executed can be registered, and there is a provision under which official search will be conducted by officials of the Land Registry. The House will realise that this is rather a complicated matter but, broadly speaking, the Clause provides for a change-over from the existing system of voluntary registration in the Deeds Registry to compulsory registry of title in the Land Registry.
I come now to the rest of the provisions arising out of the Committee's recommendations. There is the question of dormant funds, and the position of the Insurance Fund which were set up under the Act of 1897 to meet, in the first instance, claims which might be made by those who had claims against the Land Registry on the ground that the Land Registry had made a mistake in registering someone as the owner of land. In the case of most of the claims that could be made the Consolidated Fund stood behind the Insurance Fund, and if the claims arising exceeded the Insurance Fund the excess was borne by the Consolidated Fund. In these circumstances it may be asked why have an Insurance Fund at all? The Committee considered that point and came to the conclusion that for administrative reasons and possibly also for psychological reasons it was useful to keep such a Fund in existence, but they recommended that its amount should be fixed at £100,000, and there is machinery in the Bill for seeing that it should remain at or about that sum.
At present the assets stand at £430,000. Therefore under the Bill the excess over the £100,000 will go to the Treasury for the purpose of debt redemption. The claims against this fund in the past have been very small, something in the nature of £1,100. There may be one claim still outstanding, but not for a substantial amount. The House will, however, appreciate that the possible liabilities of the fund are very large. For instance, if a mistake was made in the case of a valuable property the fund might be called upon to pay a very large sum. Therefore, although the claims in the past have been small, it would be wrong to say that £400,000 was necessarily a figure beyond any claim that might be made on the fund.

Sir PERCY HARRIS: Will the Attorney-General make clear what he means when he says that the surplus is to be used for debt redemption? Does he mean redemption of the cost of buildings, or is it to be transferred to the Consolidated Fund?

The ATTORNEY-GENERAL: It will be transferred generally to the Consolidated Fund, which has a, liability in respect of claims, and go generally to the redemption of debt. I think with that explanation I may go through the Clauses. Clause 3 deals with a small subsidiary matter. Section 75 of the Land Registry Act, 1925, dealt with the special position of a person who obtained what is called a squatter's title. Under that Act a person in that position was for some reason restricted in the compensation he could get to the amount obtainable from the Insurance Fund. He did not have the advantage of the Consolidated Fund being behind the Insurance Fund if the Insurance Fund was insufficient. That person who has a title will in future be placed in the position that if there is not enough money in the fund to pay his claim the Consolidated Fund will pay. It was not clear in the Act of 1925 whether he had, as other claimants had, a right to go to the court, if aggrieved. That point has been made clear. If he is dissatisfied with any compensation awarded by the registrar he can go to the court.
Clause 4 provides that the assets of the Insurance Fund, except assets to the value of £100,000, shall be applied towards the redemption of the National Debt. Clause 5 sets up a provision for standardising the value of assets to round about £100,000, and provides that the excess shall go to the Treasury. Under Sub-section (2) the liability of the Consolidated Fund to meet any claim which exceeds the amount in the Insurance Fund, is laid down, and there is the necessary machinery for keeping it up to the standard. The Consolidated Fund will have a slightly wider liability than before, because it has to meet any claims which may be in excess of the Insurance Fund, in respect of squatter's rights.

Mr. ALBERY: Will the Attorney-General explain why in Subsection (1) any surplus should go to the Exchequer and not to the Consolidated Fund?

The ATTORNEY-GENERAL: The reason is that it is not contemplated that

there will be much surplus. The present surplus of £300,000 will go to the redemption of debt. There is machinery for seeing that the fees should not be such that there should be a surplus. Then Clause 6 corrects what, I think, is obviously a small slip in the drafting of the 1925 Act. Section 85 of that Act, which provides for the indemnities payable, did not cover the whole of the liabilities of the fund. Clause 7 deals with the question of the fees and re-enacts in rather clearer words than were in the Act of 1925 the principle upon which the Land Registry fees are settled, namely, that the fees should cover the cost of the Land Registry, the salaries and so on which fall upon it, give the necessary sum to produce the Insurance Fund to meet any claims should they arise, and cover small extra administrative expenses. The principle is embodied in the Act of 1925, but the words here make the position a little clearer. Clause 8 merely deals with the determination of values, and Clause 9 with the short title, construction, citation and repeal. I think I have substantially covered all the ground, but if any hon. Member has any question to ask I hope with the permission of the House to be allowed to deal with it.

10.6 p.m.

Mr. A. HENDERSON: I do not think there is anything very controversial in this Bill, but perhaps it is unfortunate that the law should not provide for compulsory registration of land without the necessity for local authorities having to make orders from time to time. But there it is. The law does provide for the making of these orders and at any rate there is still the protection afforded by the six months provision as to notice. There are just two points I should like to raise. I should like to know in the first place, whether the Attorney-General could assist me in a matter that arises under Section 75 of the 1925 Act. Under that Clause compensation is payable out of what is called the Indemnity Fund, but I find in this Bill a provision is made that the compensation is to be paid out of the Insurance Fund established under the 1897 Act. I am wondering why it has become necessary to transfer that liability from the Indemnity Fund to which reference is made in Section 75 of the 1925 Act to the Insurance Fund under the 1897 Act. The second point I would


like to raise is in connection with the provision contained in Section 5 (3) of this Bill which says:
…'the expression the standard value' means one hundred thousand pounds or such greater or less sum as may from time to time be fixed by the Lord Chancellor and the Treasury.
That Sub-section as it stands gives power to the Lord Chancellor and the Treasury to raise that standard value from £100,000 to any sum within their discretion. Is it not preferable, and in fact desirable, that Parliament should retain some control. As the Clause stands there is no limit, and while the Lord Chancellor and the Treasury would, I am sure, always use their discretion reasonably, I would ask the learned Attorney-General whether he would not accept the suggestion that some provision should be inserted either to fix a definite maximum beyond which the Lord Chancellor and the Treasury may not go, or a provision that if they do exceed it the approval of the House must be secured. If the Attorney-General could give us some satisfaction on these points, I feel sure that we on this side of the House would accept the Bill.

10.11 p.m.

Sir P. HARRIS: I would like to congratulate the Attorney-General on the enormous range and variety of his work. I criticised him last Friday for his association with a Bill very much outside his Department, but now he is in his proper sphere and with his usual lucidity he has made this Bill clear even to laymen. I happen to have taken an interest for many years in this Department. It is a very remarkable Departments and the Lord Chancellor who is the Law Officer responsible for it to Parliament has every reason to be proud of it. In the very early days of its existence the work it aimed to do was very much criticised and very much opposed by solicitors who thought it would infringe their interests and reduce the amount of their income. As a result of the efficient running of the Department, I think it is now recognised that where its powers are compulsory it cheapens the transfer of land and makes it easier to transfer land because the owner feels secure in his title. For that reason it stimulates transfers. There has been an enormous increase in the number of transfers of property, particularly in the London area. That should be welcomed, because I think we should all like

to see the time when land can be transferred as easily as any other form of property. By making transfer easier it is made easier for property owners to put land to its best use.
Not only has there been during the last 10 or 12 years an enormous increase in transfers in the London area where it has been compulsory, but it must be very satisfactory to the Lord Chancellor as the head of the Department that there has been a steady decrease—I think I am right in saying this—in the cost of transfers. It is that steady decrease in cost, together with the large increase in the number of transfers and the improvement in the efficiency of the organisation, that has enabled the Attorney-General to come to the House with his nice little surplus. He does not talk about it with great pride and satisfaction. He speaks of it almost with modesty. After all, this surplus really arises from a little bit of what I think we may call State trading—useful law work done by the State that has proved profitable. My hon. Friend above the Gangway when he was speaking about it referred to the insurance fund and the possible liability to the State. I think I am right in saying that the State has made a, very good bargain in this Department. I do not blame the State which has to look after the interests of the taxpayers as a whole. They took over a liability and have got a substantial surplus of over 400,000, part of which is to go to the Consolidated Fund and the rest to the ordinary working account. If the Department is run on present lines there is every prospect of an annual surplus being available which will more than compensate the State for any risk they may take over in the Insurance Fund. I think the hon. and learned Gentleman should have spoken with more emphasis of the good investment which this Department is proving to the State and Treasury.
The Attorney-General referred to the acceptance of compulsory registration by the county of Middlesex. We have had it for over 30 years in London. Two modest experiments have been made by towns in the south of England. The enterprising towns of Eastbourne and Hastings asked to have compulsory registration applied to them. Now Middlesex is having the same principle


applied. Too much publicity cannot be given to this branch of the Department. Although there has been an increase in the amount of voluntary registration in the provinces we are still awaiting applications for compulsory registration. H owners of property and those interested in the transfer of land would only realise the great advantage which this is proving to property owners and lawyers as a result of the experiment in London, applications for compulsory powers would, I think, be requested by the rest of the country. I congratulate the Department on its most successful and efficient administration. It speaks very well of the land registrar and his able and competent staff. The Attorney-General said that there had not been many claims. They are infinitesimal, and the reason of course is that every year the Department gets more experienced, and., therefore, the claims will not be more but less. It is a good Bill, and I hope the hon. and learned Member will make it quite clear that the Treasury has made a good bargain.

10.19 p.m.

Mr. GOLDIE: The hon. Member for South-West Bethnal Green (Sir P. Harris) has congratulated the Attorney-General on his nice little surplus. I have no knowledge beyond my own personal experience of the efficiency with which the Department is carried on, but I should be grateful if the Attorney-General will tell us where this surplus of £448,000 comes from. To a man with little knowledge of insurance work it would seem that as the claims since 1897 are only £1,189 15s. 1d., the surplus now before us of £448,000 is rather out of proportion. Unfortunately I did not know the point was going to be raised, and I have not with me the Land Transfer Act of 1897. Could the Attorney-General, if he replies, tell the House where that sum has come from, to what extent it is due to the fees which have been paid, and to what extent it is due to sums which have been very properly contributed on an insurance basis by the members of the most efficient staff in the Land Registry?

10.21 p.m.

Major MILNER: I regret that I was not present when the. Attorney-General spoke, and I do not therefore know

whether he paid due tribute to the county of Yorkshire, which first established land registration. I am told that the Attorney-General did not mention Yorkshire, but I will take it upon myself to do so and to give credit to that county, more particularly the West Riding, for the introduction of this system of land registration about which so much of a congratulatory nature has been said during the last few minutes. I would like to say, as a practising solicitor, that undoubtedly the land registration system is a very great convenience to the legal profession and to the public, and is a great safeguard. I think that if ever there were any worthy grounds for the suggestion which the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) made, that the legal profession was rather against land registration, the objections have now very largely disappeared, at any rate among the younger practitioners. All that we have heard about its having being a good investment for the State and so on only goes to show that the State ought to play a greater part in many of these matters than it plays to-day.
There is another point I would like to make. It would appear, subject to anything which the Attorney-General may say, that in a period of about 39 years a sum totaling £448,000 has been accumulated, for the most part, I assume, from the fees paid by those doing business in the registry. Although only £1,189 has been paid out in claims during the whole of that period, it is still proposed to retain some £100,000 in the Registry, to hand the balance over to the State, and still to continue charging the fees which have resulted in a period of 39 years in the accumulation of that very large sum. I suggest to the Attorney-General that he ought at any rate to consider with the Departments whether it would not be possible to add to the convenience of and lessen the expense to the public—because, of course, all these fees are charged to those who have dealings in land—by reducing the amount of the fees. It appears to me that it ought to be possible to make a very considerable reduction in the fees.
The only other comment I would like to make is that it is not quite correct to say that the business of the Land Regis-


try has always been carried on without there being complaints. There have been complaints in one respect. It may be that my experience of London is not very large, but I have had fairly lengthy experience of registration in Yorkshire, where the expedition is much greater than it is in London. There are complaints from the legal profession in London of the delay which takes place at the Land Registry in registering and in furnishing the particulars required, and in other matters of that sort. I agree that in general the administration is of a very high character, but there are complaints with regard to delays. I would like to ask the Attorney-General, first, whether the matter of delay could be looked into; arid, secondly, whether in the circumstances in which this Bill is introduced, it would not be possible very materially to reduce the fees, to the still greater convenience of the public.

10.25 p.m.

Mr. PRITT: I want to say of the principle of this Bill in general—I heartily welcome the Bill—that the House should realise that there has been a very strong vested interest, the good old-fashioned type of conveyancing interest, which has been systematically fighting the cheapening and simplification of the registration of land for years and years, simply in the defence of their own selfish interests, like anybody else who finds his own immediate personal interests threatened. It has been a long battle between the public interest and common sense, on the one side, and the vested interest of conveyancing on the other. I say this frankly in favour of the moderate mood which the Attorney-General represents, that on the whole the battle has been an interesting and succesful example of what can be done by "slow and steady" against vested interests rather than by more violent steps. I want, however, to join in the criticism that has been made of the proposals in Clause 5 in regard to the insurance fund and to reproach the hon. Member for South-West Bethnal Green (Sir P. Harris) for unorthodox finance, which was the one thing which one would not expect from a, Member of the party of which he is an ornament. It is important, although it is a small matter, that the transfer of land, sometimes of very modest capital value, should not cost more than is necessary. If you make a little levy for insurance it is right

and proper, so long as you do not regard it as a method of making some sort of rake-off, as the hon. Baronet seemed to suggest you should do.

Sir P. HARRIS: On the contrary, I wanted to make it clear that the Attorney-General was trying to conceal the pinching of a nest egg which really belongs to the Department.

Mr. PRITT: The hon. Baronet reinforces what I say, for he wants somebody to have a nest egg laid by the golden goose who is the modest person who wants to sell his cottage to his neighbour. I say that it is right to charge a levy for a genuine insurance on principles of underwriting which are, I believe, familiar to the Attorney-General. It is quite reasonable, if you discover that you have spent a good many years building up too large an insurance fund, that you should say, "Well, the Government have to carry the burden of any unexpected loss, and they may as well have this money." One would be an exceptional purist to object to that, but is it right to object to any idea of saying, "Of course, we will keep £100,000 there, because there may be a big loss at any moment, but let us go on collecting these fees and year by year hand over the surplus to the National Debt." That is simply levying an unorthodox and concealed taxation on a small section of a particular class of the community.

Mr. ALBERY: It is going to be handed over to the Chancellor of the Exchequer.

Mr. PRITT: If the hon. Member will read the Bill more carefully, I think he will find that he is mostly wrong, that in most cases it will be handed over to the Commissioners of the National Debt, not to the Treasury. But whatever it is that is going to be worked upon that basis, it is a concealed form of fraudulent taxation—the Attorney-General will understand that I do not use that term in any offensive sense—on a section of the community. If he says that Clause 5 makes no provision for anything of that sort, and that anybody who intelligently works Sub-section (3) of that Clause would work it merely on a definite insurance basis, I agree that there is nothing in Clause 5 to show that there is going to, be any taxation on the sly.
There is an atmosphere about the Bill which justifies my suggestion that there is going to be a. little profit. The hon. Baronet certainly thinks that there will be. I ask the Attorney-General to say that it is no part of the policy of the Government to claim from persons who happen to be selling or buying land anything more than a proper charge for underwriting the risk which the fund and the Government between them are bearing. I should be happier still if the hon. and learned Gentleman said that he proposed at some stage to put in Clause 5, Sub-section (3) something to show that the £100,000 is not going to be dealt with by the gentlemen who have control of it of their own sweet will, but will be dealt with simply on underwriting principles.

Mr. ALBERY: Sub-section (1) of Clause 5 says:
If at the end of any financial year the value of the assets of the insurance fund exceeds the standard value an amount equal to the excess shall, at such time as the Treasury may direct, be paid out of the insurance fund into the Exchequer.
It seems to me that if there is to be any substantial surplus it should go to the Consolidated Fund and not to the Exchequer. If there is any loss over and above the 100,000 remaining in the fund, the Consolidated Fund would presumably have to bear it. Therefore, any surplus should go to the Consolidated Fund.

10.32 p.m.

Mr. SPENS: I should not have spoken had it not been for the speech of the hon. and learned Gentleman opposite, who tried to cast the usual aspersions on the two branches of the legal profession in connection with conveyancing. I believe that, so far as my branch of the profession is concerned, I am the only Member who had anything to do with conveyancing in his younger days. It is a common charge made by persons who desire to criticise the legal profession, and it is one which is very much resented by those persons who have been engaged in conveyancing. Neither branch of the legal profession has any power whatever to decide whether or not the compulsory provisions of the Registration Act shall be brought in for any district in the country. They have nothing whatever to do with it. What has happened is that, until the

great reforming Acts of 1925 were passed, it was an extremely expensive thing for any landowner to present a clear title to the Land Registration Office and get an absolute title. Very many landowners who would willingly have had their land registered were deterred from so doing until these reforms were passed.
The fact that so many more persons have gone in for registration of later years is very largely due to the beneficial effect, as I believe, of those Acts, although many members of my profession would not agree with me. The reason why compulsory registration is difficult in this country as opposed to Scotland, where it has been in existence for hundreds of years, is that people in this country are for some reason shy of the publicity which they believe is attached to it. They think that their neighbours may come to know the prices they have got for their land. I believe it is very largely a completely unfounded prejudice, and I firmly believe that no more benecial thing can happen than that the compulsory registration of land should be encouraged as much as possible. Finally, I should like to add my portion of praise to the Attorney-General for having at any rate taken one step forward in trying to facilitate this change in this country, and I hope that in time to come this House may be able to do still more to make the transference of land easier and less expensive than it is at the present time.

10.36 p.m.

Mr. MacLAREN: I am of the opinion that when the Law of Property Acts were passed in this House one of the best supplements that could have been added to that monumental legislation would have been to have compelled—almost—every area in England to establish a registry of its own. We have heard tonight of the timidity of the owners to confess the value of their land; they do not like it to be made too public. I know why. It is inconvenient that the public should know the market value of the land when it was last sold. I think that if registries were established all over the country not merely would it facilitate the transfer of land, but it would be of definite advantage in respect of legislation which this House must contemplate sooner or later. I have heard to-night for the first time in my life that conveyancing lawyers and solicitors generally


have been very anxious for this change. Surely we all know of cases where the search may take a man all his life and all the life of his children after he is dead. However, I am glad to hear that there is no vested interest here in any of the upper or lower stratas of the legal profession, and that they are all anxious to have this registration.
For my own part I think it ought to be imposed by Act of Parliament upon every part of this country. The difficulty in town planning or developing certain parts of England is that the local authorities constantly find themselves struggling to arrive at some basis of valuation. In Committee upstairs and elsewhere one cannot help noticing that when London is attempting to get a new roadway made out of London so that, in the ease of a gas attack—which God forbid—we should have wider roadways for the safety of the public apart from ordinary traffic problems local authorities are handicapped in making agreements with regard to the land. Registration would help all that and, therefore, I feel that I should not be quite living up to my reputation if I did not add my benediction to the praise which the Bill has already received. As to what we have heard about, shall we call it, unjustified taxation, I shall not weep about that. The people who dabble in the holding up and selling of land can well afford to pay the fees. If they did not get the service of the registry for that fee one can realise, by doing a little proportion sum, what they would have to pay for the searching solicitor if he were called in. I am not at all concerned about those people.

10.40 p.m.

The ATTORNEY-GENERAL: The hon. Member for Kingswinford. (Mr. A. Henderson) asked a question about Section 75 of the Act of 1925, and pointed to that Section as referring to the Act of 1897. The two funds are of the same kind. For some reason into which I need not enter one was called an Indemnity Fund. The hon. Member also suggested a lowering or raising of the amount of the fund without a special order of the House. As I explained to the House, those are rather Committee points, and there is no reason why the House should postpone the Second Reading of the Bill

in order to deal with them. I cannot think of any sinister reason which might have actuated anybody who might have benefited by that process.
I would associate myself with the tribute paid by the hon. Baronet for South-West Bethnal Green (Sir P. Harris) to the Land Registry and the work they have done. It is not an exaggeration to say that the scheme under which the Land Registry works solved a problem which had exercised the minds of people for two centuries, as to what would be a satisfactory scheme for the registration of land. The success of the scheme is due not only to its merits, but to the way in which it has been worked and administered by those responsible for it. The hon. Baronet and several other speakers referred to the fact that there has been a surplus. It comes out of fees and, of course, interest on invested money. Whether or not it is a surplus depends upon whether the record of the past 37 years, or whatever it is, with regard to the claims, continues. There is no intention on the part of my noble Friend the Lord Chancellor to adopt the principle of providing a little nest-egg for the Chancellor of the Exchequer every year. The suggestion of the hon. and gamant Member for South-East Leeds (Major Milner) will be borne in mind. There was pandemonium when the Land Registry was first taking over this new business. It was impossible to reduce fees because of the expenses incurred in consequence of that fact. It was thought advisable to wait for a year or two to see what extra expenses are placed upon the Registry upon the existing scale of fees.

Captain DOWER: Is the hon. and learned Gentleman suggesting that there will be a reduction of fees and that the Land Registry will find that they are in a position to reduce them?

The ATTORNEY-GENERAL: I think that what I am saying is clear. If, over a period of years, the receipts have been larger than the expenditure, one is entitled to ask whether that is likely to go on for ever, and the answer is clearly in the negative. Indeed, Clause 7 of the Bill lays down principles which are inconsistent with a continuing surplus year by year. It is thought inadvisable to consider a reduction of the existing fees


at the moment, until there has been at any rate a year or two's experience of the new arrangement. What the result of that experience will be I cannot say.

Mr. ALBERY: Would there not be a much greater chance of the fees being reduced if the surplus went into the Consolidated Fund than if it went to the Chancellor of the Exchequer?

The ATTORNEY-GENERAL: One never speaks of money going into the Consolidated Fund; it always goes into the Treasury, and it always goes out of the Consolidated Fund. These are the appropriate words when we are dealing with an annual sum. It is not the intention of my Noble Friend that the fees should continue on such a basis that they regularly exceed the expenses of the Land Registry, but I think it will be agreed that it would be the worst possible thing to reduce the fees and then find that the work had become more expensive. With regard to the complaints of delay referred to by the hon. and gallant Member for South East Leeds (Major Milner), all I can say is that the appropriate place to go into such matters is not really the Second Reading of this Bill, but perhaps the hon. and gallant Member will bring them to our attention later. The hon. and learned Member for North Hammersmith (Mr. Pritt) paid a tribute to the slow and steady progress which the Land Registry has made, and I, of course, agree with that part of his speech. I think I have dealt with his comments on the fund in what I have already said. The hon. Member for Burslem (Mr. MacLaren) closed his speech on a note of benediction for the Bill, and I do not think he gave me any question to answer. I should, perhaps, have drawn the attention of the House in my first speech to the Financial Resolution, which is the next business on the Order Paper, and which is necessary to give effect to the Clause I have already explained.

Orders of the Day — LAND REGISTRATION [MONEY]

Considered in Committee under Standing Order No. 69.

[Sir DENNIS HERBERT in the Chair.]

Resolved,
That for the purposes of any Act of the present Session to amend the law with respect to Land Registration and the Insurance Fund established under the Land Transfer Act, 1897, it is expedient to authorise the payment out of the Consolidated fund—

(a) of such sums as may become payable therefrom by reason of the repeal of the proviso to Section seventy-five of the Land Registration Act, 1925;
(b) of such sums as may become necessary to enable the said Insurance Fund to pay indemnity for any loss chargeable thereon or to bring the value of the assets thereof up to a standard value;

and to authorise the payment out of the said Insurance Fund into the Exchequer of the amount by which the value of the assets of that fund at the end of any financial year exceeds that standard value."—(King's Recommendation signified.)—[The Attorney-General.]

Resolution to be reported To-morrow.

LAND REGISTRATION ACT, 1925.

Resolved,
That the draft of an Order in Council declaring that registration of title to land is to be compulsory on sale in the administrative county of Middlesex, which was presented to this House on the fourth day of February, nineteen hundred and thirty-six, be approved."—[The Attorney-General.]

Orders of the Day — FIREARMS (AMENDMENT) BILL [Lords].

Order for Second Reading read.

10.56 p.m.

The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Simon): I beg to move, "That the Bill be now read a Second time."
This Bill comes to us from the House of Lords, where it was passed without amendment. It has nothing to do with the general question of armaments, and raises no question of major principle, but is a useful Departmental Measure, and, in substance, quite uncontroversial. It is concerned with a number of miscellaneous amendments which experience has shown


to be desirable in our domestic law relating to the internal control of firearms and ammunition. It is based on the recommendations of a Departmental Committee which was set up in 1934, and on which three Members of this House served, the hon. Member for Rothwell (Mr. Lunn), the hon. Member for East Lewisham (Sir A. Pownall), and a third Member, now unhappily dead, who, I think, drew specific attention to the need of amendment of the law, the late Sir John Pybus. The Committee was presided over by Sir Archibald Bodkin and had representatives on it of the Departments concerned and persons with firsthand knowledge of the trade. We are all obliged to the Committee for the trouble which they took and the useful recommendations which they made.
The Bill amends the existing Firearms Act, 1920. That was not because it was supposed that the general system of control set up by that Act was unsatisfactory. It was rather because experience had shown that it was desirable to amend the law in a number of details. The most important one and the only one which, I think, the House would wish me to explain on Second Reading has to do with the definition and classification of the weapons which are for the purposes of the Act called firearms. The general object of the main Act, the Act of 1920, as now amended, is to secure that dangerous weapons should not get into the hands of people who cannot fairly be trusted with them, either because they are criminals or insane, of drunken habits, too young, or whatever the reason may be. Leaving aside the question of prohibited weapons, of which the best example is a weapon constructed to distribute poison gas, the Act subjected to control broadly all firearms except smooth-bore sporting shotguns and airguns—weapons operated by compressed air. It established a system of registration of manufacturers and dealers in firearms and it restricted the purchase, possession and use of firearms to persons who had obtained certificates from the chief officer of police. This Bill amends that classification, not in principle but in detail. It will remain the law that all rifled weapons will be subject to control and, broadly speaking, that all air weapons will be free from control except as regards the special prohibitions in the Act.
The main amendment that it makes as regards definitions is that it will leave outside control ordinary smooth-bore sporting guns but it will draw a line according to the length of the barrel, and in future all smooth-bore guns having a barrel of 20 inches or more in length will be exempt, but a smooth-bore weapon with a shorter barrel than that will be subject to control. The object of that is to ensure that, while we do not interfere with the legitimate sporting use of shotguns, shorter barrelled weapons, which by reason of their being easy to conceal and more likely to be used for criminal purposes are especially dangerous, shall be kept under control. Consequently, there is a Clause which makes it an offence for anyone who has a smoothbore weapon with a long barrel to shorten the barrel to a length of less than 20 inches. In the same way there are provisions which would improve the state of the law about safety or dummy pistols, which may be used as toys or starting pistols for athletic purposes but which are capable of being turned into lethal weapons. There are a number of provisions of detail suggested by the Committee which will undoubtedly increase the reasonable regulation of this kind of instrument.
The Bill is perhaps a little complicated in its terms. That is because if these Amendments are approved it will then be possible—I hope it may be done very soon—to put the whole of the law on this subject, which is at present to be found in three Acts of Parliament, into a single consolidated Measure which will be as simple, straightforward, intelligible and comprehensive as any consolidation can be. Unless hon. Members wish for information on any other Clause, which I will do my best to supply, I think I have said all that is necessary in moving the Second Reading and I shall be very glad if the House will approve the principle of the Bill. If there are any details on individual Clauses, they will more naturally be raised in Committee.

10.59 p.m.

Mr. LUNN: This is the last of a long list of uncontroversial Bills that we have had to-day—an unusual day's proceedings it has been—and I have listened to most of them. I think the right hon. Gentleman has fairly well explained the provisions of the Bill. As he says, I was


a member of the Departmental Committee. The only reason that I could ever think of why I was made a member of it is that we were in such small numbers on this side of the House in the last Parliament that it was difficult to find Members who could take office in the many committees that were set up by the Government at that time. Perhaps I knew as little about firearms as any Member of this House. I never remembered having handled a firearm until I became a member of the Departmental Committee. I have had a long experience in this House and have found that it is not necessary that a Member should know a great deal about a subject in order to be able to speak upon it and take part in a debate. At the same time, I devoted myself to the work of that committee, and I was a regular attender. I should like to pay a tribute to the chairman. Sir Archibald Bodkin was the most remarkable chairman under whom I have ever sat in my life. He thoroughly grasped the subject and was helpful to every member of the committee, making it very easy for us to understand and to come to decisions upon matters, which, I am sure, as a result of the report which we all signed at the end of our deliberations, are in the interests of the nation as a whole. The Bill will tighten up the law in many respects in regard to certification and registration. There have been, as the right hon. Gentleman has said, Acts of Parliament dealing with firearms before the introduction of this Bill, which is a sort of consolidating Measure in that it contains many of the provisions in the principal Act of 1920. There are not so many Amendments, but they will be for the safety of the public of this country when the Bill is passed into law.
There are one or two things upon which I have a little doubt. I was pleased that we were able to see a weapon which was in the form of a miniature machine gun, and which, when the trigger is pulled, fires continuously until the magazine is exhausted. Instruments as deadly and destructive as that must naturally be prohibited, and we sought to prohibit many things of that character which were brought before us during the wonderful evidence we heard from many people of experience from all parts of England and Scotland,

who knew much about the subject of the danger of firearms to the public. But I had my doubts about the easy manner in which rifle clubs were able to claim exemption. This may not need amendment, but it is a matter that should be watched very carefully to see that irresponsible people are not allowed to give out exemptions for the use of firearms in that connection. I should prohibit dummy or toy pistols which can be so easily converted into deadly weapons. The matter might well be looked into when the Bill is in Committee to see if it is possible to prohibit toy pistols which can be so easily converted into dangerous weapons. It may be possible to strengthen the Bill with regard to prohibited weapons or substances which are poisonous or obnoxious, whether solids, liquids or gases. Clause 7 might well be strengthened upon that point, in regard to which some of us had doubts when we were considering it as a Departmental Committee. I think the Bill will make the law more understandable in regard to firearms and will prevent in this country some of the things that are common in other countries. I know little about firearms, have no interest in them, and am not anxious to handle them. I only handled them as a member of the Departmental Committee and may never handle them again. I believe the law can be strengthened as a result of this Bill and that the public will be safeguarded from some of the dangers that may happen if we do not pass the Measure.

11.6 p.m.

Mr. K. GRIFFITH: We on these benches welcome the Bill. It is a difficult thing for the Home Secretary to hold the balance in this matter between preventing things which are really dangerous and interfering with the legitimate amusements of the public. I think this Bill does that. We shall have to wait for the Consolidation Bill to get everything in its final form. Meanwhile, we are glad that a matter which was so near to the heart of our late and regretted friend, Sir John Pybus, has been dealt with.

11.7 p.m.

Sir J. SIMON: I thank my hon. Friend the Member for the Rothwell Division (Mr. Lunn) for remedying an omission that I made. It is important to make it


plain that in a Clause of this Bill there is a list of weapons that are prohibited. One weapon is sometimes called—I defer to the expert opinion of my hon. Friend—a sub-machine gun. That is to say, it is a weapon which, when the trigger has been pulled, will continuously fire until the magazine is exhausted, without any further action on the part of the holder. It is a weapon of the type which was used at the assassination of King Alexander of Yugoslavia, and the weapon which we are informed is used by gangsters on the other side of the water. We do not want it here. There is no possible legitimate reason why anyone should have it, and I think the fact alone that there is prohibition of that weapon will go a long way to commend the Bill to the House.

COINAGE OFFENCES BILL. [LORDS.]

Considered in Committee; reported, without Amendment; read the Third time, and passed, without Amendment.

MEMORIAL TO ADMIRAL OF THE FLEET EARL BEATTY.

Resolution reported:
That an humble Address be presented to His Majesty, praying that His Majesty will give directions that a monument be erected at the public charge to the memory of the late Admiral of the Fleet Earl Beatty, as an expression of the admiration of this House for his illustrious naval career and its gratitude for his devoted services to the State, and to assure His Majesty that this House will make good the expenses attending the same.

Address to be presented by Privy Councillors or Members of His Majesty's Household.

The remaining Orders were read, and postponed.

Orders of the Day — PENARTH DOCK (CLOSING).

Motion made, and Question proposed, "That this House do now adjourn."—[Sir G. Penny.]

11.12 p.m.

Captain ARTHUR EVANS: I must apologise to the House for raising such an important subject at this late hour but I am sure the House will appreciate this is the only opportunity open to me. I desire to draw attention to the closing of the Penarth Dock by the Great Western Railway Company, their obligations to South Wales generally, and the responsibility of the Government in the matter. First of all with regard to the action of the Great Western Railway Company. I would like to say that in the unanimous view of the Welsh Parliamentary party, representative of all political beliefs, and in the opinion of Welsh public opinion generally, it is a most unfortunate decision and one that should never have been made. I think it is fair to say that in the past the sound financial position of the Great Western Railway Company has been built largely on the revenues it has derived from South Wales industries and particularly the exporting and importing activities of the docks. Indeed, the position was so favourable in 1922 that the company came to Parliament and asked for powers to acquire all the dock and railway undertakings of their competitors in the area and so enjoy all the conveniences of a monopoly. Since those halcyon days, South Wales has passed and is passing through times of dire stress. Everybody has been affected, even such immense and powerful organisations as the Great Western Railway Company themselves, and we find that to-day they are accepting financial assistance from the taxpayers of the country through the agency of loan guarantees and under agreements with the Treasury. In reply to a question which I put to my right hon. Friend the Chancellor of the Exchequer last week, I was informed that the company had already received a sum of £5,000 for improving the dock facilities in Penarth Dock itself and that they were to benefit by no less a sum than £5,500,000 under agreement with the Treasury.
That the Great Western Railway Company has a solemn obligation and responsibility beyond that of internal and local economies there can be no doubt, but my submission is that when they accept public money for the purpose of improving the public service then their obligation and responsibility is emphasised and


clearly defined. As far as obligations are concerned I am advised that when opposition was threatened to their merger plan in 1922 in the Committee upstairs, the Great Western Railway gave a specific assurance that in no circumstances would any part of the docks be allowed to be brought into a worse condition than if pre-merger conditions applied. If pre-merger conditions did apply to-day and competition still obtained—one thing is certain—Penarth Dock would not be closing down in July next. To my mind and in the minds of many of my political friends it is disastrous that at a time when everybody concerned with the welfare of South Wales are doing their utmost to encourage new industries—to extend our present trade—to remedy our present deplorable conditions—that the Great Western Railway—in order to save a comparatively small sum of about £20,000 a year—and at a time when the company as a whole is paying dividends to its shareholders and enjoying the benefit of Government finance should take this moment to proclaim to the world that their sense of obligation to the past and their faith in the future of industrial South Wales is to be measured by their decision to close Penarth Dock, cut down facilities, create unemployment and aim a fatal blow at an area already hard hit, which, through no fault of its own, is unable to defend itself against monopoly interests.
But what is the position and attitude of the Government in all this? Have they no responsibility at all in the matter? Are they going to comfortably sit back and say "this is purely a matter between local interests, the Penarth Urban District Council and the Great Western Railway"? I confess that I was shocked when the Prime Minister did not see fit to answer the question I put to him the other day as to whether the Government had protested to the Great Western Railway when their decision had been made known, and I was indeed bitterly disappointed when I particularly asked the Chancellor of the Exchequer a few days later whether the Government would approach the Great Western Railway with a view to seeing if anything could be done to improve the situation—to receive no assurance.
I will not deal with the debatable question as to why the export coal trade of

South Wales has declined—I must just accept it as a fact. This is the reason, however, given by the Great Western Railway why the dock is to be closed, and I require to know, in the first place, as to whether the Government are satisfied that they could not have influenced the Great Western Railway to change their mind; and if they are prepared to offer some financial assistance or practical alternative help of Government work to compensate for the loss of trade. I have in mind, of course, the establishment of Government works in the area, parts of which are most suitable for such purposes, and which have been referred to in a speech by the Lord President of the Council.
Why is there this delay in announcing the decision of the Government? The excuse given is that the site has not been finally settled or the land purchased. Why not? Months have passed; the country wants its rearmament programme proceeded with the utmost vigour; we in South Wales want work and encouragement. Plans have been submitted to the authorities, hundreds of suggestions to improve conditions in South Wales have been made from sources as diverse and far apart as the Commissioner for Special Areas and the Bishop of Llandaff's Committee. Apart from the subsidy for British tramp shipping, nothing much has been done and we are slowly losing our population, losing our livelihoods, losing our jobs and some of us losing heart.
The Government cannot turn a blind eye to South Wales and hope that something of its own accord will turn up and improve the situation. We are getting impatient. In a few days the Welsh Parliamentary party, which comprise representatives of all political opinion in this House will submit once again to the Government practical suggestions for improving the situation. We demand action. I am a loyal supporter of the Government and of the Conservative party—as those who have been through many hard-fought elections in Cardiff and elsewhere with me will readily testify—but I say in all sincerity to the Government: "Tackle this question before it is too late, away with indolence, show some mental energy and vigour and prove to an eagerly-waiting and anxious people that once again the National Government will not be found wanting in one of the


greatest and most difficult problems of modern times." I do not ask for an answer to-night, but, I hope the Financial Secretary will consider these points and convey my remarks to the proper quarters, and when I raise this question again—as I will formally do on a Motion for the Adjournment next week—I hope he will be able to give a considered and encouraging statement.

11.24 p.m.

Mr. W. S. MORRISON: My hon. and gallant Friend has invited me not to reply to the remarks he has made to-night, but my concern is to try to clarify the responsibility in this matter of the Great Western Railway and the Government. This great railway company has, at least on the figures which it has supplied recently, a very good excuse for closing this dock, because the actual net revenue received from the dock, £16,000 in 1929, in 1931 became a loss of £12,000 and in 1935 a loss of £32,000. The Great Western Railway Company is not the Government. It is a trading corporation, and as such it is bound to consider the economic value of its various undertakings.

Sir REGINALD CLARRY: Without statutory power?

Mr. MORRISON: The question as to whether the railway company had power to close the dock is a matter for decision by the courts and not by the Government. Now look at the magnitude of the problem. The total staff employed at Penarth Dock is 188, and 52 of these will be retained. I am told that the dock is to be closed temporarily—

Captain A. EVANS: Is it not a fact that in law they are not entitled to abandon the dock, and that, because of that fact, they are announcing to the public that they propose to close it temporarily?

Mr. MORRISON: The hon. and gallant Member should allow me to reply. It is a question of law, which can be settled between those aggrieved and the company. I am told that the dock is not to be closed permanently, but temporarily, and that access will still be afforded to vessels proceeding to the Penarth Pontoon Dock, and that the coal shipping berths will continue to be available. I

am also told that the temporary closing of the dock will not lead to any loss of business in the dock itself, and this is an important point, because existing trade can be accommodated perfectly well at Penarth harbour or Cardiff or Barry; so that the closing of the dock is not a thing which closes off trade.
As to the position of the Government, the hon. and gallant Member made the point that since assistance had been offered to the railway company by the Government the Government have some responsibility in the matter. Under the Development Act of 1929 the conditions are such that nothing is paid by the Treasury in respect of any period during which, by the action of this company the facilities of the dock are not available, and that as far as the Government's responsibility is concerned, when the dock is closed payments cease. In regard to the later Act to which reference has been made, the one passed in this House last autumn, that Act scheduled certain works chosen by agreement between the railway company and the Treasury. The object sought in that choice was that the works scheduled should be those works which would not be undertaken, by the railway company as part of the normal programme of renewal and repair but were new works which, without this particular guarantee, would not be undertaken. That is the scope of the Act of 1935. It is simply that certain works should be undertaken which were works outside the normal programme of the company, so that fresh employment could be given. Apart from that, the Government have no responsibility. It is a matter for the railway company. The Government have seen that the works under that Act are being undertaken and that is the limit of their responsibility, and the hon. and gallant Member should not proceed to stretch it any further.
It seems to me, in general, that if one were to insist that a statutory corporation like a railway company should carry on its business in an uneconomic fashion for the sake of some local, and no doubt, grave need, that would be to produce a state of affairs which would reduce the companies to an insolvent condition. That is not the position of the Government. We must allow the companies to conduct their own affairs, in so far as they are not bound by Statute, in the


way they consider to be in their own interests. My brief answer to the hon. and gallant Member is, first, that the railway company has told us that this is a temporary measure; and, secondly, that so far as the Government are concerned, they have no power to influence this

matter. All the matters in which the Government are connected with the railway company have been observed by the company.

It being Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.